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 ETF TRUST
(Formerly known as VanEck Vectors ETF Trust)
(Exact name of registrant as specified in charter)
666 Third Avenue, New York, NY 10017
(Address of principal executive offices) (Zip code)
Van Eck Associates Corporation
666 THIRD AVENUE, NEW YORK, NY 10017
(Name and address of agent for service)
Registrant’s telephone number, including area code: (212) 293-2000
Date of fiscal year end: SEPTEMBER 30
Date of reporting period: SEPTEMBER 30, 2021
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Item 1. Report to Shareholders
ANNUAL
REPORT
September 30, 2021 |
Biotech ETF | BBH |
Digital Transformation ETF | DAPP |
Environmental Services ETF | EVX® |
Gaming ETF | BJK® |
Pharmaceutical ETF | PPH® |
Retail ETF | RTH® |
Semiconductor ETF | SMH® |
Video Gaming and eSports ETF | ESPO® |
800.826.2333 | vaneck.com |
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Certain information contained in this report represents the opinion of the investment adviser which may change at any time. This information is not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue. The information contained herein regarding each index has been provided by the relevant index provider. Also, unless otherwise specifically noted, any discussion of the Funds’ holdings, the Funds’ performance, and the views of the investment adviser are as of September 30, 2021.
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VANECK ETFs
September 30, 2021
(unaudited)
Dear Fellow Shareholders:
This letter addresses two topics: first, the risks to the markets today and, second, two multi-year themes.
The Economy
When we think about financial markets, since the future remains unknown, we seek to identify potential scenarios. At the beginning of this year, the global economy was like a car hurtling forward at 200 miles per hour. Over the summer, we expected an orderly slowdown, asking only “What are the risks to Goldilocks?”1 We thought the car could slow to 70 miles per hour without putting too much pressure on interest rates, driven by inflation, which would upset the financial markets. The markets today are pondering the question, “Are we hitting the brakes too hard?” I think not.
In the U.S., will the U.S. Federal Reserve (Fed) hit the brakes too hard? I don’t think so. First, while the financial markets are still debating whether we have an inflation problem, I don’t think we will know whether we have permanent inflation until late next year. It is true that we are talking about supply chain issues and labor market issues longer than the transitory camp would like. But while commodity price inflation matters, the real concern about inflation and financial markets is wage inflation, since it tends to be longer-lasting and may affect long-term interest rates.
Second, if inflation doesn’t push rates higher, I don’t think the Fed will hit the brakes too hard by raising rates. Bank of America recently released a research note2 that said over half of the S&P 500® Index’s returns in the past decade can be attributed to the Fed’s balance sheet expansion, rather than earnings. We live in an era in which the Fed has an eye on the financial markets. Why would that change?
What about China? Will real estate or other factors like COVID-19 cause a recession? While China growth is becoming soggy, we think policy makers have all the tools, including liquidity moves, to avoid a crash.
Multi-Year Investment Themes
So what to do in your portfolio? We are focusing on two multi-year investment themes.
The first theme is the energy transition away from fossil fuels. We see this not only as being driven by government policy, but also by innovation in the private sector. In our resources portfolios, we’re looking for disruptive companies in the sectors that need to be more energy efficient. One is agriculture (which emits about as much CO2 as the energy sector). AgTech businesses are embracing technology to modernize agriculture, leading to higher crop yields, safer crop chemicals and other innovations in food production to provide healthy diets for the world’s growing population.
The second theme is the use of blockchain in a large variety of industries, but especially finance and entertainment. New open-source database technology is enabling incredibly rapid adoption and at much lower cost than traditional companies using prior generation technology. The fintech revolution that goes hand in hand with crypto is something we find really exciting. There are some over-valued companies, but we think it’s another interesting multi-year trend that investors should consider.
Another surprise that has affected commodity prices is that, as the economy grows and demand for commodities grows, increasing supply has become harder. This is in part due to environmental, social and governance (ESG) policies in place, causing “greenflation” and a multi-year trend of price pressure. Finding supply sources like new copper, lithium or gold mines is harder because of, to a certain extent, the environmental impact of these activities. I think this supply issue will continue to underpin commodity prices, and is why I believe that commodity equities are an interesting investment that people should have in their portfolios.
We sincerely thank you for investing in VanEck’s investment strategies. On the following pages, you will find a performance discussion and financial statements for each of the funds for the twelve month period ended September 30, 2021. As always, we value your continued confidence in us and look forward to helping you meet your investment goals in the future.
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VANECK ETFs
PRESIDENT’S LETTER
(unaudited) (continued)
Jan F. van Eck
CEO and President
VanEck ETF Trust
October 18, 2021
1 | A Goldilocks economy is an economy that is not so hot that it causes inflation and not so cold that it causes a recession. |
2 | Source: Bloomberg, https://www.bloomberg.com/news/articles/2021-09-08/bofa-s-subramanian-dumps-dire-stock-call-to-catch-up-with-rally |
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VANECK ETFs
September 30, 2021 (unaudited)
Biotech
Biotech stocks had a good year, with the VanEck Biotech ETF gaining 25.13%. Rising steadily during the 12 month period, stocks hit highs in mid-October 2020 and early-February 2021 (both followed by downturns), and in early-August 2021. However, even after quite a significant sell-off in the first week of September 2021, the Fund ended the period having made a gain.
While, by mid-September 2020, the FDA had approved 40 “novel drugs”,1 over the next three months (despite COVID-19) a further 13 were added and the total tally for the year was 53.2 By mid-September 2021, a little down on the previous year at the same time, some 37 novel drugs had already been approved.3
The three top positive contributions to the Fund’s performance came from: Moderna (10.4% of Fund net assets†), BioNTech (3.8% of Fund net assets†) and Alexion Pharmaceuticals (not held at period end†). The companies that detracted most from performance were: Vertex Pharmaceuticals (5.2% of Fund net assets†), Amgen (8.6% of Fund net assets†) and Sarepta Therapeutics (sold by Fund by period end†).
Environmental Services
The VanEck Environmental Services ETF had an excellent year, gaining 44.50% over the 12 month period under review. Following a slight dip at the end of October 2020, environmental services stocks climbed slowly but surely through the end of the reporting period without any further, noteworthy declines.
Following the slowdown in economic activity resulting from the COVID-19 virus earlier in 2020, the pace of activity became more rapid as the year progressed “with many firms able to sustain and even beat revenue forecasts in the pandemic year.”4
Growth in 2021 has been, and continues to be driven, amongst other factors, by: corporations’ increasing commitment to ESG and sustainability, consolidation and M&A activity, sustained interested in both reuse and recycling and last, but not least, by the changing regulatory backdrop.
Large-cap stocks contributed the greatest total returns, followed, respectively, by mid- and small-cap stocks. Covanta Holding (3.1% of Fund net assets†), Darling Ingredients (3.0% of Fund net assets†) and Cantel Medical (sold by Fund by period end) were the top three contributors. PureCycle Technologies (3.0% of Fund net assets†), Energy Recovery (3.1% of Fund net assets†) and Clean Harbors (3.4% of Fund net assets†) were the only three companies to detract from performance.
Gaming
The VanEck Gaming ETF posted a gain of 24.06% for the 12 month period. Gaming stocks continued to recover strongly in the final quarter of 2020 and into 2021, reaching highs in March, April and June. Thereafter, however, even following a recovery in early-September, the final two quarters of the reporting period proved to be disappointing.
In Macau, China, the world’s biggest gaming hub, while notably down on the figures for 2019, the gross revenue from “Games of Fortune” (as the Macau authorities describe them) in October 2020 through to the end of the year were not only relatively stable, but also demonstrated a noted improvement on prior months.5 Thereafter, revenues again remained relatively stable and, after April, considerably improved on 2020, but in August 2021, however, they nearly halved.6 In September, on the one hand, earlier in the month we saw optimism that lighter COVID-19 restrictions might help increase traffic and, on the other, later in the month, casino stocks fell across the board as the Macau government indicated that it would seek greater oversight and planned to impose more onerous concession agreements, moves that “could wrest control of the lucrative industry away from foreign shareholders.”7
In Nevada, during the 12 month period, we saw the “gaming win”8 remain relatively stable each month and trend higher as the period progressed—from a low of $683,733,423 in December 2020 to $1,359,876,493 in July 20219
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VANECK ETFs
MANAGEMENT DISCUSSION (unaudited) (continued)
U.S.-, Sweden- and Australia-listed companies were the leading contributors to performance. Two countries detracted from performance: China and Cambodia.
Pharmaceutical
Despite a slight dip at the end of October 2020, pharmaceutical stocks had a solid, if uneventful, 12 months. By the end of the period, after somewhat of a downturn from early-September, the VanEck Pharmaceutical ETF had gained 19.10%. Vaccines for COVID-19 and expectations of potential higher government spending on drug discovery and development have helped underpin investor optimism in the sector.
While Eli Lilly, Catalent and Bausch Health Companies (4.7%, 4.3% and 3.0% of Fund net assets, respectively†) were the three largest positive contributors to performance, Takeda Pharmaceutical (4.4% of Fund net assets†), Viatris (4.4% of Fund net assets†) and Novartis (4.9% of Fund net assets†) were the Fund’s three largest detractors.
Retail
Despite sudden declines from mid- to end-October 2020 and from mid-February to early-March 2021, retail stocks had a satisfactory 12 months and the VanEck Retail ETF returned 18.13% for the period under review. While “brick and mortar”, e.g., department stores, retail has taken a battering during the COVID-19 pandemic (no customers and no staff—a continuing problem), those companies with well-developed ecommerce capabilities and those involved in specialty retail or deemed “essential” during the crisis have benefited.
Businesses involved in the consumer discretionary sub-sector specialty retail contributed by far the most to the positive performance of the Fund. Home Depot (15.4% of Fund net assets†), Target (4.4% of Fund net assets†) and CVS Health (4.6% of Fund net assets†) were the three top contributors to total returns. While no single sector (or sub-sector) detracted from performance, companies in the consumer discretionary textiles, apparel and luxury goods sub-sector contributed the least to performance. And just three companies detracted from performance: Wayfair (0.8% of Fund net assets†), JD.com (4.1% of Fund net assets†) and Best Buy (1.6% of Fund net assets†).
Semiconductor
The VanEck Semiconductor ETF had an excellent year, returning 47.94% for the 12 month period under review. In 2021 in particular, the industry has had to deal with the disruption (and with demand outstripping supply), resulting from the well-publicized chip shortage which has affected anything from auto production to consumer tech (including smartphones).10 Despite this shortage, many companies have continued to perform well and semiconductor sales have remained firm. Sales in August 2021 alone were up 29.7% year-on-year and 3.3% month-on-month.11
Large-capitalization stocks continued to be key drivers of the Fund’s returns. Taiwan Semiconductor Manufacturing Company, Applied Materials and ASML Holding (15.5%, 4.6% and 6.8% of Fund net assets, respectively†) were the three top contributing companies. A single company detracted from performance, Synopsys (2.4% of Fund net assets†) with Intel (5.4% of Fund net assets†) and Universal Display (0.4% of Fund net assets†) contributing the least positively to total returns.
Video Games and eSports
In contrast with the 12 months ending September 30, 2020, video gaming and esports stocks provided disappointing, albeit positive, returns during the reporting period with the VanEck Video Gaming and eSports ETF up 6.15%. As the early restrictions on movement associated with the COVID-19 pandemic have subsided, consumers around the world have been forced to be inside less and less and traditional entertainment options have become more plentiful. Against this backdrop, video game-related revenue growth, having soared to all-time highs, have now pulled back to more normalized levels.
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Leading contributing companies over the period were Sea, NVIDIA, and Bilibili (6.5%, 8.1% and 3.8% of the Fund’s net assets respectively†). The three companies detracting most from performance were: CD Projekt (1.6% of Fund net assets†), NEXON Company (3.4% of Fund net assets†) and Ubisoft Entertainment (2.8% of Fund net assets†).
† All Fund assets referenced are Total Net Assets as of September 30, 2021.
1 Food & Drug Administration: : Novel Drug Approvals for 2020, September 2, 2020, https://www.fda.gov/drugs/new-drugs-fda-cder-snew-molecular-entities-and-new-therapeutic-biological-products/novel-drug-approvals-2020 (Accessed September 16, 2020)
2 Food & Drug Administration: New Drug Therapy Approvals 2020, January 2021, https://www.fda.gov/drugs/new-drugs-fda-cders-new-molecular-entities-and-new-therapeutic-biological-products/novel-drug-approvals-2020 (Accessed September 22, 2021)
3 Food & Drug Administration: New Drug Therapy Approvals 2021, September 2021, https://www.fda.gov/drugs/new-drugs-fda-cders-new-molecular-entities-and-new-therapeutic-biological-products/novel-drug-approvals-2021 (Accessed October 2, 2021)
4 Engineering News-Record: 2021 Top 200 Environmental Firms: Market is Whirlwind of Change, July 14, 2021, https://www.enr.com/articles/52090-top-200-environmental-firms-market-is-whirlwind-of-change
5 Gaming Inspection and Coordination Bureau, Macao SAR: Monthly Gross Revenue from Games of Fortune, http://www.dicj.gov.mo/web/en/ information/DadosEstat_mensal/2020/index.html
6 Gaming Inspection and Coordination Bureau, Macao SAR: Monthly Gross Revenue from Games of Fortune, http://www.dicj.gov.mo/web/en/ information/DadosEstat_mensal/2021/index.html
7 The Financial Times: Macau casino operators fear end of winning streak with new gaming law, September 21, 2021, https://www.ft.com/content/417f2513-37b2-4900-ac36-4729df36ae1b
8 Or “gross revenue,” defined (in short) as: the total of all:
(a) Cash received as winnings;
(b) Cash received in payment for credit extended by a licensee to a patron for purposes of gaming; and
(c) Compensation received for conducting any game, or any contest or tournament in conjunction with interactive gaming, in which the licensee is not party to a wager, less the total of all cash paid out as losses to patrons, those amounts paid to fund periodic payments and any other items made deductible as losses by NRS 463.3715. For the purposes of this section, cash or the value of noncash prizes awarded to patrons in a contest or tournament are not losses, except that losses in a contest or tournament conducted in conjunction with an inter-casino linked system may be deducted to the extent of the compensation received for the right to participate in that contest or tournament. For a full definition see Nevada Gaming Control Act, https://www.leg.state.nv.us/NRS/NRS-463.html#NRS463Sec0161
9 Nevada Gaming Control Board: Abbreviated Revenue Release, http://gaming.nv.gov/index.aspx?page=172
10 Vox: The chip shortage is getting worse, August 5, 2021, https://www.vox.com/recode/2021/8/5/22611031/chip-shortage-cars-electronics-automakers-gm-tesla-playstation-xbox
11 Semiconductor Industry Association: Global Semiconductor Sales Increase 29.7% Year-to-Year, 3.3% Month-to-Month in August, October 4, 2021, https://www.semiconductors.org/global-semiconductor-sales-increase-29-7-year-to-year-3-3-month-to-month-in-august/
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September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MVBBHTR1 | SPTR2 | |
One Year | 25.16% | 25.13% | 25.36% | 30.00% |
Five Year | 12.36% | 12.33% | 12.52% | 16.90% |
Life* | 19.87% | 19.86% | 20.06% | 15.87% |
* | Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11. |
1 | MVIS® US Listed Biotech 25 Index (MVBBHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the biotech industry. |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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VANECK DIGITAL TRANSFORMATION ETF
PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MVDAPPTR1 | SPTR2 | |
Life* | (35.26)% | (35.30)% | (35.13)% | 5.03% |
* | Commencement of Fund: 4/12/21; First Day of Secondary Market Trading: 4/13/21. |
1 | MVIS® Global Digital Assets Equity Index (MVDAPPTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the global digital asset segment. |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on 14 for more information.
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VANECK ENVIRONMENTAL SERVICES ETF
PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | AXENVTR1 | SPTR2 | |
One Year | 43.96% | 44.50% | 45.33% | 30.00% |
Five Year | 16.14% | 16.13% | 16.61% | 16.90% |
Ten Year | 13.27% | 13.42% | 13.94% | 16.63% |
1 | NYSE Arca Environmental Services Index (AXENVTR) is a rules based, modified equal dollar weighted index intended to give investors a means of tracking the overall performance of the common stocks and depositary receipts of U.S. exchange-listed companies involved in environmental services. |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Ten Year) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV over the past 10 years. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MVBJKTR1 | SPTR2 | |
One Year | 24.61% | 24.06% | 25.29% | 30.00% |
Five Year | 8.60% | 8.59% | 9.13% | 16.90% |
Ten Year | 8.75% | 8.59% | 8.98% | 16.63% |
1 | MVIS® Global Gaming Index (MVBJKTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the casino and gaming industry. |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Ten Year) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV over the past 10 years. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MVPPHTR1 | SPTR2 | |
One Year | 19.14% | 19.10% | 18.75% | 30.00% |
Five Year | 6.79% | 6.75% | 6.60% | 16.90% |
Life* | 9.80% | 9.67% | 9.56% | 15.87% |
* | Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11. |
1 | MVIS® US Listed Pharmaceutical 25 Index (MVPPHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the pharmaceutical industry. |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MVRTHTR1 | SPTR2 | |
One Year | 18.22% | 18.13% | 18.11% | 30.00% |
Five Year | 18.94% | 18.91% | 18.78% | 16.90% |
Life* | 18.63% | 18.49% | 18.33% | 15.87% |
* | Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11. |
1 | MVIS® US Listed Retail 25 Index (MVRTHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the retail industry. |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MVSMHTR1 | SPTR2 | |
One Year | 48.14% | 47.94% | 48.11% | 30.00% |
Five Year | 31.47% | 31.51% | 31.51% | 16.90% |
Life* | 26.20% | 26.23% | 26.18% | 15.87% |
* | Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11. |
1 | MVIS® US Listed Semiconductor 25 Index (MVSMHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the semiconductor industry. |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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VANECK VIDEO GAMING AND ESPORTS ETF
PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MVESPOTR1 | SPTR2 | |
One Year | 5.75% | 6.15% | 7.35% | 30.00% |
Life* | 28.80% | 28.83% | 29.92% | 17.66% |
* | Commencement of Fund: 10/16/18; First Day of Secondary Market Trading: 10/17/18. |
1 | The MVIS® Global Video Gaming and eSports Index (MVESPOTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in video gaming and eSports. |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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ABOUT FUND PERFORMANCE
(unaudited)
The price used to calculate market return (Share Price) is determined by using the closing price listed on its primary listing exchange. Since the shares of each Fund did not trade in the secondary market until after each Fund’s commencement, for the period from commencement to the first day of secondary market trading in shares of each Fund, the NAV of each Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for each Fund reflects temporary waivers of expenses and/or fees. Had each Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.
Investment return and value of the shares of each Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Fund returns reflect reinvestment of dividends and capital gains distributions. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.
Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Certain indices may take into account withholding taxes. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.
The Biotech Index, Digital Transformation Index, Gaming Index, Pharmaceutical Index, Retail Index, Semiconductor Index and Video Gaming and eSports Index are published by MV Index Solutions GmbH (MVIS®), which is a wholly owned subsidiary of the Adviser, Van Eck Associates Corporation. The Environmental Services Index is published by ICE Data Indices, LLC (ICE Data).
MVIS and ICE Data are referred to herein as the “Index Providers”. The Index Providers do not sponsor, endorse, or promote the Funds and bear no liability with respect to the Funds or any security.
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EXPLANATION OF EXPENSES
(unaudited)
Hypothetical $1,000 investment at beginning of period
As a shareholder of a Fund, you incur operating expenses, including management fees and other Fund expenses. This disclosure is intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The disclosure is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, April 1, 2021 to September 30, 2021.
Actual Expenses
The first line in the table below provides information about account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning
Account Value April 1, 2021 |
Ending
Account Value September 30, 2021 |
Annualized
Expense Ratio During Period |
Expenses Paid
During the Period April 1, 2021 - September 30, 2021* |
|
Biotech ETF | ||||
Actual | $1,000.00 | $1,152.90 | 0.35% | $1.89 |
Hypothetical** | $1,000.00 | $1,023.31 | 0.35% | $1.78 |
Digital Transformation ETF | ||||
Actual *** | $1,000.00 | $647.00 | 0.58% | $2.24 |
Hypothetical** | $1,000.00 | $1,022.16 | 0.58% | $2.94 |
Environmental Services ETF | ||||
Actual | $1,000.00 | $1,083.50 | 0.55% | $2.87 |
Hypothetical** | $1,000.00 | $1,022.31 | 0.55% | $2.79 |
Gaming ETF | ||||
Actual | $1,000.00 | $906.50 | 0.61% | $2.92 |
Hypothetical** | $1,000.00 | $1,022.01 | 0.61% | $3.09 |
Pharmaceutical ETF | ||||
Actual | $1,000.00 | $1,063.70 | 0.35% | $1.81 |
Hypothetical** | $1,000.00 | $1,023.31 | 0.35% | $1.78 |
Retail ETF | ||||
Actual | $1,000.00 | $1,058.90 | 0.35% | $1.81 |
Hypothetical** | $1,000.00 | $1,023.31 | 0.35% | $1.78 |
Semiconductor ETF | ||||
Actual | $1,000.00 | $1,053.10 | 0.35% | $1.80 |
Hypothetical** | $1,000.00 | $1,023.31 | 0.35% | $1.78 |
15 |
|
VANECK ETF TRUST
EXPLANATION OF EXPENSES
(unaudited) (continued)
Beginning
Account Value April 1, 2021 |
Ending
Account Value September 30, 2021 |
Annualized
Expense Ratio During Period |
Expenses Paid
During the Period April 1, 2021 - September 30, 2021* |
|
Video Gaming and eSports ETF | ||||
Actual | $1,000.00 | $954.20 | 0.57% | $2.79 |
Hypothetical** | $1,000.00 | $1,022.21 | 0.57% | $2.89 |
* | Expenses are equal to the Fund’s annualized expense ratio (for the six months ended September 30, 2021), multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year divided by the number of the days in the fiscal year (to reflect the one-half year period). |
** | Assumes annual return of 5% before expenses |
*** | Expenses are equal to the Fund’s annualized expense ratio (for the period from April 13, 2021 (commencement of operations) to September 30, 2021) multiplied by the average account value over the period, multiplied by the number of days since the commencement of operations divided by the number of days in the fiscal year. |
16 |
|
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 99.9% | ||||||||
China: 3.3% | ||||||||
BeiGene Ltd. (ADR) * | 52,822 | $ | 19,174,386 | |||||
Germany: 3.9% | ||||||||
BioNTech SE (ADR) * | 84,828 | 23,157,196 | ||||||
Ireland: 4.9% | ||||||||
ICON Plc (USD) * | 109,770 | 28,761,935 | ||||||
Switzerland: 1.7% | ||||||||
CRISPR Therapeutics AG (USD) * † | 87,917 | 9,840,550 | ||||||
United States: 86.1% | ||||||||
10X Genomics, Inc. * | 64,782 | 9,430,964 | ||||||
Alnylam Pharmaceuticals, Inc. * | 92,701 | 17,502,876 | ||||||
Amgen, Inc. | 228,255 | 48,538,426 | ||||||
Biogen, Inc. * | 98,560 | 27,891,494 | ||||||
BioMarin Pharmaceutical, Inc. * | 148,975 | 11,514,278 | ||||||
Bio-Techne Corp. | 48,899 | 23,694,988 | ||||||
Charles River Laboratories International, Inc. * | 60,602 | 25,008,627 |
Number
of Shares |
Value | |||||||
United States (continued) | ||||||||
Exact Sciences Corp. * † | 195,593 | $ | 18,669,352 | |||||
Gilead Sciences, Inc. | 468,984 | 32,758,532 | ||||||
Guardant Health, Inc. * | 131,690 | 16,462,567 | ||||||
Illumina, Inc. * | 68,448 | 27,763,193 | ||||||
Incyte Corp. * | 168,665 | 11,600,779 | ||||||
Intellia Therapeutics, Inc. * | 66,874 | 8,971,147 | ||||||
IQVIA Holdings, Inc. * | 121,003 | 28,985,059 | ||||||
Moderna, Inc. * | 175,770 | 67,646,842 | ||||||
Natera, Inc. * | 117,348 | 13,077,261 | ||||||
Novavax, Inc. * | 93,200 | 19,321,292 | ||||||
QIAGEN NV * † | 293,518 | 15,169,010 | ||||||
Regeneron Pharmaceuticals, Inc. * | 47,359 | 28,660,720 | ||||||
Seagen, Inc. * | 150,779 | 25,602,274 | ||||||
Vertex Pharmaceuticals, Inc. * | 165,604 | 30,038,910 | ||||||
508,308,591 | ||||||||
Total Common Stocks
(Cost: $507,260,247) |
589,242,658 | |||||||
Total Investments: 99.9%
(Cost: $507,260,247) |
589,242,658 | |||||||
Other assets less liabilities: 0.1% | 877,755 | |||||||
NET ASSETS: 100.0% | $ | 590,120,413 |
Definitions:
ADR | American Depositary Receipt |
USD | United States Dollar |
Footnotes:
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $24,961,286. |
Summary of Investments by Sector |
% of
Investments |
Value | ||||||
Biotechnology | 70.3 | % | $ | 413,966,315 | ||||
Health Care Services | 2.8 | 16,462,567 | ||||||
Life Sciences Tools & Services | 26.9 | 158,813,776 | ||||||
100.0 | % | $ | 589,242,658 |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks * | $ | 589,242,658 | $ | — | $ | — | $ | 589,242,658 |
* | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
17 |
|
VANECK DIGITAL TRANSFORMATION ETF
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 99.9% | ||||||||
Canada: 13.7% | ||||||||
Bitfarms Ltd. (USD) * | 412,765 | $ | 1,754,251 | |||||
DMG Blockchain Solutions, Inc. * | 623,956 | 453,124 | ||||||
Hive Blockchain Technologies Ltd. (USD) * † | 766,010 | 2,045,247 | ||||||
Hut 8 Mining Corp. (USD) * | 238,397 | 2,002,535 | ||||||
6,255,157 | ||||||||
China: 7.8% | ||||||||
BC Technology Group Ltd. (HKD) # * | 556,000 | 876,079 | ||||||
Canaan, Inc. (ADR) * † | 287,833 | 1,758,660 | ||||||
Ebang International Holdings, Inc. (USD) * | 489,798 | 930,616 | ||||||
3,565,355 | ||||||||
Germany: 5.3% | ||||||||
Northern Data AG * † | 27,995 | 2,404,160 | ||||||
Hong Kong: 5.4% | ||||||||
BIT Mining Ltd. (ADR) * | 208,774 | 1,705,684 | ||||||
Diginex Ltd. (USD) * | 131,477 | 425,985 | ||||||
Huobi Technology Holdings Ltd. # * | 349,500 | 357,795 | ||||||
2,489,464 | ||||||||
Jersey, Channel Islands: 1.4% | ||||||||
Coinshares International Ltd. (SEK) # * † | 82,136 | 629,102 | ||||||
United Kingdom: 4.4% | ||||||||
Argo Blockchain Plc # * † | 1,285,664 | 2,005,536 | ||||||
United States: 61.9% | ||||||||
Bit Digital, Inc. * † | 151,732 | 1,097,022 |
Definitions:
ADR | American Depositary Receipt |
CAD | Canadian Dollar |
HKD | Hong Kong Dollar |
SEK | Swedish Krona |
USD | United States Dollar |
Footnotes:
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $7,998,120. |
# | Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $3,868,512 which represents 8.5% of net assets. |
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of
Investments |
Value | ||||||
Financials | 23.5 | % | $ | 10,720,156 | ||||
Information Technology | 76.5 | 34,858,088 | ||||||
100.0 | % | $ | 45,578,244 |
See Notes to Financial Statements
18 |
|
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks | ||||||||||||||||
Canada | $ | 6,255,157 | $ | — | $ | — | $ | 6,255,157 | ||||||||
China | 2,689,276 | 876,079 | — | 3,565,355 | ||||||||||||
Germany | 2,404,160 | — | — | 2,404,160 | ||||||||||||
Hong Kong | 2,131,669 | 357,795 | — | 2,489,464 | ||||||||||||
Jersey, Channel Islands | — | 629,102 | — | 629,102 | ||||||||||||
United Kingdom | — | 2,005,536 | — | 2,005,536 | ||||||||||||
United States | 28,229,470 | — | — | 28,229,470 | ||||||||||||
Money Market Fund | 4,964,972 | — | — | 4,964,972 | ||||||||||||
Total Investments | $ | 46,674,704 | $ | 3,868,512 | $ | — | $ | 50,543,216 |
See Notes to Financial Statements
19 |
|
VANECK ENVIRONMENTAL SERVICES ETF
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 99.9% | ||||||||
Canada: 5.4% | ||||||||
GFL Environmental, Inc. (USD) † | 58,036 | $ | 2,156,037 | |||||
Loop Industries, Inc. (USD) * † | 128,311 | 1,466,595 | ||||||
3,622,632 | ||||||||
United States: 94.5% | ||||||||
ABM Industries, Inc. | 46,964 | 2,113,850 | ||||||
Advanced Emissions Solutions, Inc. * | 207,817 | 1,327,951 | ||||||
Casella Waste Systems, Inc. * | 28,221 | 2,143,103 | ||||||
Clean Harbors, Inc. * | 21,381 | 2,220,845 | ||||||
Covanta Holding Corp. | 105,278 | 2,118,193 | ||||||
Darling Ingredients, Inc. * | 28,056 | 2,017,226 | ||||||
Donaldson Co., Inc. | 35,122 | 2,016,354 | ||||||
Ecolab, Inc. | 31,029 | 6,473,270 | ||||||
Energy Recovery, Inc. * † | 108,738 | 2,069,284 | ||||||
Evoqua Water Technologies Corp. * | 55,743 | 2,093,707 | ||||||
Heritage-Crystal Clean, Inc. * | 48,496 | 1,405,414 | ||||||
Montrose Environmental Group, Inc. * | 35,768 | 2,208,316 | ||||||
PureCycle Technologies, Inc. * † | 163,865 | 2,176,127 | ||||||
Republic Services, Inc. | 54,884 | 6,589,373 | ||||||
Schnitzer Steel Industries, Inc. | 51,650 | 2,262,787 |
Definitions: | |
USD | United States Dollar |
Footnotes: | |
† | Security fully or partially on loan. Total market value of securities on loan is $3,719,858. |
* | Non-income producing |
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of
Investments |
Value | ||||||
Consumer Staples | 3.0 | % | $ | 2,017,227 | ||||
Health Care | 4.9 | 3,300,203 | ||||||
Industrials | 71.7 | 48,202,194 | ||||||
Materials | 20.4 | 13,706,729 | ||||||
100.0 | % | $ | 67,226,353 |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks * | $ | 67,226,353 | $ | — | $ | — | $ | 67,226,353 | ||||||||
Money Market Fund | 1,227,822 | — | — | 1,227,822 | ||||||||||||
Total Investments | $ | 68,454,175 | $ | — | $ | — | $ | 68,454,175 |
* | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
20 |
|
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 99.9% | ||||||||
Australia: 11.7% | ||||||||
Aristocrat Leisure Ltd. # | 241,427 | $ | 8,022,362 | |||||
Crown Resorts Ltd. # * | 164,339 | 1,124,023 | ||||||
Star Entertainment Group Ltd. # * | 456,952 | 1,450,195 | ||||||
Tabcorp Holdings Ltd. # | 958,509 | 3,327,660 | ||||||
13,924,240 | ||||||||
Cambodia: 0.6% | ||||||||
NagaCorp Ltd. (HKD) # | 842,000 | 718,357 | ||||||
France: 2.3% | ||||||||
La Francaise des Jeux SAEM 144A # | 53,564 | 2,755,536 | ||||||
Greece: 1.4% | ||||||||
OPAP SA # | 104,956 | 1,624,600 | ||||||
Hong Kong: 0.9% | ||||||||
Melco International | ||||||||
Development Ltd. # * | 229,000 | 269,761 | ||||||
Melco Resorts & Entertainment Ltd. (ADR) * | 82,720 | 847,053 | ||||||
1,116,814 | ||||||||
Ireland: 7.7% | ||||||||
Flutter Entertainment Plc # * | 45,735 | 9,075,404 | ||||||
Italy: 1.2% | ||||||||
International Game Technology Plc (USD) * † | 55,330 | 1,456,286 | ||||||
Japan: 1.0% | ||||||||
Heiwa Corp. # † | 30,100 | 562,068 | ||||||
Sankyo Co. Ltd. # | 23,279 | 577,254 | ||||||
1,139,322 | ||||||||
Macao: 5.1% | ||||||||
Galaxy Entertainment Group Ltd. (HKD) # * | 1,030,240 | 5,286,193 | ||||||
SJM Holdings Ltd. (HKD) # * † | 1,134,000 | 770,752 | ||||||
6,056,945 | ||||||||
Malaysia: 3.5% | ||||||||
Genting Bhd | 1,183,700 | 1,425,020 | ||||||
Genting Malaysia Bhd # | 1,554,898 | 1,110,802 | ||||||
Genting Singapore Ltd. (SGD) # | 3,058,100 | 1,612,621 | ||||||
4,148,443 | ||||||||
Malta: 1.5% | ||||||||
Kindred Group Plc (SDR) # | 115,421 | 1,732,011 |
Definitions: | |
ADR | American Depositary Receipt |
HKD | Hong Kong Dollar |
SDR | Swedish Depositary Receipt |
SGD | Singapore Dollar |
USD | United States Dollar |
See Notes to Financial Statements
21 |
|
VANECK GAMING ETF
SCHEDULE OF INVESTMENTS
(continued)
Footnotes: | |
# | Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued |
securities is $60,958,702 which represents 51.5% of net assets. | |
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $19,046,196. |
144A | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted $11,858,422, or 10.0% of net assets. |
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of
Investments |
Value | ||||||
Communication Services | 1.0 | % | $ | 1,220,940 | ||||
Consumer Discretionary | 90.1 | 106,463,723 | ||||||
Real Estate | 8.9 | 10,551,743 | ||||||
100.0 | % | $ | 118,236,406 |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks | ||||||||||||||||
Australia | $ | — | $ | 13,924,240 | $ | — | $ | 13,924,240 | ||||||||
Cambodia | — | 718,357 | — | 718,357 | ||||||||||||
France | — | 2,755,536 | — | 2,755,536 | ||||||||||||
Greece | — | 1,624,600 | — | 1,624,600 | ||||||||||||
Hong Kong | 847,053 | 269,761 | — | 1,116,814 | ||||||||||||
Ireland | — | 9,075,404 | — | 9,075,404 | ||||||||||||
Italy | 1,456,286 | — | — | 1,456,286 | ||||||||||||
Japan | — | 1,139,322 | — | 1,139,322 | ||||||||||||
Macao | — | 6,056,945 | — | 6,056,945 | ||||||||||||
Malaysia | 1,425,020 | 2,723,423 | — | 4,148,443 | ||||||||||||
Malta | — | 1,732,011 | — | 1,732,011 | ||||||||||||
New Zealand | — | 669,595 | — | 669,595 | ||||||||||||
South Korea | — | 1,635,604 | — | 1,635,604 | ||||||||||||
Sweden | — | 9,102,886 | — | 9,102,886 | ||||||||||||
United Kingdom | 721,229 | 6,378,274 | — | 7,099,503 | ||||||||||||
United States | 52,828,116 | 3,152,744 | — | 55,980,860 | ||||||||||||
Money Market Fund | 1,210,699 | — | — | 1,210,699 | ||||||||||||
Total Investments | $ | 58,488,403 | $ | 60,958,702 | $ | — | $ | 119,447,105 |
See Notes to Financial Statements
22 |
|
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 99.7% | ||||||||
Denmark: 5.0% | ||||||||
Novo Nordisk A/S (ADR) | 165,036 | $ | 15,845,106 | |||||
France: 5.0% | ||||||||
Sanofi SA (ADR) | 331,587 | 15,985,809 | ||||||
Ireland: 0.7% | ||||||||
Amarin Corp. Plc (ADR) * † | 477,546 | 2,435,485 | ||||||
Israel: 3.8% | ||||||||
Teva Pharmaceutical Industries Ltd. (ADR) * | 1,260,713 | 12,279,345 | ||||||
Japan: 4.5% | ||||||||
Takeda Pharmaceutical Co. Ltd. (ADR) † | 872,651 | 14,294,023 | ||||||
Switzerland: 4.9% | ||||||||
Novartis AG (ADR) | 189,781 | 15,520,290 | ||||||
United Kingdom: 9.9% | ||||||||
AstraZeneca Plc (ADR) | 291,206 | 17,489,832 | ||||||
GlaxoSmithKline Plc (ADR) † | 369,132 | 14,104,534 | ||||||
31,594,366 | ||||||||
United States: 65.9% | ||||||||
AbbVie, Inc. | 150,590 | 16,244,143 | ||||||
AmerisourceBergen Corp. | 120,322 | 14,372,463 | ||||||
Bausch Health Cos, Inc. * | 340,243 | 9,475,768 | ||||||
Bristol-Myers Squibb Co. | 255,994 | 15,147,165 | ||||||
Catalent, Inc. * | 105,074 | 13,982,197 |
Definitions: | |
ADR | American Depositary Receipt |
Footnotes: | |
† | Security fully or partially on loan. Total market value of securities on loan is $21,722,584. |
* | Non-income producing |
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of
Investments |
Value | ||||||
Biotechnology | 5.9 | % | $ | 18,679,628 | ||||
Health Care Distributors | 9.6 | 30,626,224 | ||||||
Pharmaceuticals | 84.5 | 268,759,199 | ||||||
100.0 | % | $ | 318,065,051 |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks * | $ | 318,065,051 | $ | — | $ | — | $ | 318,065,051 | ||||||||
Money Market Fund | 17,187,701 | — | — | 17,187,701 | ||||||||||||
Total Investments | $ | 335,252,752 | $ | — | $ | — | $ | 335,252,752 |
* | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
23 |
|
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 100.0% | ||||||||
China: 4.1% | ||||||||
JD.com, Inc. (ADR) * | 137,051 | $ | 9,900,564 | |||||
United States: 95.9% | ||||||||
Amazon.com, Inc. * | 14,122 | 46,391,335 | ||||||
AmerisourceBergen Corp. | 28,177 | 3,365,743 | ||||||
AutoZone, Inc. * | 4,161 | 7,065,336 | ||||||
Bath & Body Works, Inc. | 34,027 | 2,144,722 | ||||||
Best Buy Co., Inc. | 36,182 | 3,824,799 | ||||||
Cardinal Health, Inc. | 48,065 | 2,377,295 | ||||||
Costco Wholesale Corp. | 26,725 | 12,008,879 | ||||||
CVS Health Corp. | 129,914 | 11,024,502 | ||||||
Dollar General Corp. | 36,464 | 7,735,473 | ||||||
Dollar Tree, Inc. * | 41,354 | 3,958,405 | ||||||
Lowe’s Companies, Inc. | 60,979 | 12,370,200 | ||||||
Lululemon Athletica, Inc. * | 15,467 | 6,259,495 | ||||||
McKesson Corp. | 28,442 | 5,670,766 | ||||||
O’Reilly Automotive, Inc. * | 13,471 | 8,231,589 | ||||||
Ross Stores, Inc. | 57,988 | 6,311,994 | ||||||
Sysco Corp. | 92,981 | 7,299,009 | ||||||
Target Corp. | 45,514 | 10,412,238 | ||||||
The Gap, Inc. | 63,966 | 1,452,028 |
Definitions: | |
ADR | American Depositary Receipt |
Footnotes: | |
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $1,855,514. |
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of
Investments |
Value | ||||||
Consumer Discretionary | 73.2 | % | $ | 175,559,981 | ||||
Consumer Staples | 17.4 | 41,704,520 | ||||||
Health Care | 9.4 | 22,438,305 | ||||||
100.0 | % | $ | 239,702,806 |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 2 | Level 3 | |||||||||||||||
Level 1 | Significant | Significant | ||||||||||||||
Quoted | Observable | Unobservable | ||||||||||||||
Prices | Inputs | Inputs | Value | |||||||||||||
Common Stocks * | $ | 239,702,806 | $ | — | $ | — | $ | 239,702,806 | ||||||||
Money Market Fund | 293,092 | — | — | 293,092 | ||||||||||||
Total Investments | $ | 239,995,898 | $ | — | $ | — | $ | 239,995,898 |
* | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
24 |
|
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 99.8% | ||||||||
Netherlands: 9.6% | ||||||||
ASML Holding N.V. (USD) | 538,867 | $ | 401,515,190 | |||||
NXP Semiconductors N.V. (USD) | 871,339 | 170,669,170 | ||||||
572,184,360 | ||||||||
Switzerland: 1.9% | ||||||||
STMicroelectronics N.V. (USD) † | 2,533,870 | 110,552,748 | ||||||
Taiwan: 15.5% | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR) | 8,253,872 | 921,544,809 | ||||||
United States: 72.8% | ||||||||
Advanced Micro Devices, Inc. * | 2,648,492 | 272,529,827 | ||||||
Analog Devices, Inc. | 1,698,144 | 284,405,157 | ||||||
Applied Materials, Inc. | 2,105,354 | 271,022,220 | ||||||
Broadcom, Inc. | 568,770 | 275,813,636 | ||||||
Cadence Design Systems, Inc. * | 804,626 | 121,852,562 | ||||||
Intel Corp. | 5,832,259 | 310,742,760 | ||||||
KLA Corp. | 450,458 | 150,682,706 | ||||||
Lam Research Corp. | 460,526 | 262,108,373 | ||||||
Marvell Technology, Inc. | 2,324,878 | 140,213,392 | ||||||
Microchip Technology, Inc. | 808,196 | 124,050,004 | ||||||
Micron Technology, Inc. | 3,890,835 | 276,171,468 | ||||||
NVIDIA Corp. | 3,216,957 | 666,424,812 | ||||||
ON Semiconductor Corp. * | 1,241,352 | 56,816,681 |
Number
of Shares |
Value | |||||||
United States (continued) | ||||||||
Qorvo, Inc. * | 384,226 | $ | 64,238,745 | |||||
Qualcomm, Inc. | 2,192,221 | 282,752,665 | ||||||
Skyworks Solutions, Inc. | 556,625 | 91,720,668 | ||||||
Synopsys, Inc. * | 475,468 | 142,359,874 | ||||||
Teradyne, Inc. | 556,049 | 60,703,869 | ||||||
Texas Instruments, Inc. | 1,654,840 | 318,076,796 | ||||||
Universal Display Corp. | 154,846 | 26,472,472 | ||||||
Xilinx, Inc. | 838,972 | 126,676,382 | ||||||
4,325,835,069 | ||||||||
Total Common Stocks
(Cost: $6,083,422,970) |
5,930,116,986 | |||||||
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 1.5%
(Cost: $86,922,750) |
||||||||
Money Market Fund: 1.5% | ||||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 86,922,750 | 86,922,750 | ||||||
Total Investments: 101.3%
(Cost: $6,170,345,720) |
6,017,039,736 | |||||||
Liabilities in excess of other assets: (1.3)% | (79,428,729) | |||||||
NET ASSETS: 100.0% | $ | 5,937,611,007 |
Definitions: | |
ADR | American Depositary Receipt |
USD | United States Dollar |
Footnotes: | |
† | Security fully or partially on loan. Total market value of securities on loan is $87,531,989. |
* | Non-income producing |
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of
Investments |
Value | ||||||
Application Software | 4.5 | % | $ | 264,212,435 | ||||
Semiconductor Equipment | 19.3 | 1,146,032,359 | ||||||
Semiconductors | 76.2 | 4,519,872,192 | ||||||
100.0 | % | $ | 5,930,116,986 |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks * | $ | 5,930,116,986 | $ | — | $ | — | $ | 5,930,116,986 | ||||||||
Money Market Fund | 86,922,750 | — | — | 86,922,750 | ||||||||||||
Total Investments | $ | 6,017,039,736 | $ | — | $ | — | $ | 6,017,039,736 |
* | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
25 |
|
VANECK VIDEO GAMING AND ESPORTS ETF
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 100.0% | ||||||||
China: 17.9% | ||||||||
Bilibili, Inc. (ADR) * † | 359,097 | $ | 23,761,449 | |||||
Kingsoft Corp. Ltd. (HKD) # | 2,163,000 | 8,611,723 | ||||||
NetEase, Inc. (ADR) | 377,108 | 32,205,023 | ||||||
Tencent Holdings Ltd. (HKD) # | 812,000 | 48,475,358 | ||||||
113,053,553 | ||||||||
France: 2.7% | ||||||||
Ubisoft Entertainment SA # * | 285,408 | 17,099,717 | ||||||
Japan: 20.4% | ||||||||
Bandai Namco Holdings, Inc. # | 403,400 | 30,250,555 | ||||||
Capcom Co. Ltd. # | 514,000 | 14,246,223 | ||||||
Konami Holdings Corp. # † | 255,500 | 15,974,350 | ||||||
Nexon Co. Ltd. # | 1,361,300 | 21,794,782 | ||||||
Nintendo Co. Ltd. # | 83,000 | 39,564,719 | ||||||
Square Enix Holdings Co. Ltd. # | 125,300 | 6,679,947 | ||||||
128,510,576 | ||||||||
Poland: 1.6% | ||||||||
CD Projekt SA # † | 205,787 | 9,937,283 | ||||||
South Korea: 4.2% | ||||||||
NCSoft Corp. # | 40,363 | 20,446,024 | ||||||
Netmarble Corp. 144A # | 62,710 | 6,189,947 | ||||||
26,635,971 | ||||||||
Sweden: 2.8% | ||||||||
Embracer Group AB # * † | 1,390,342 | 13,331,512 | ||||||
Stillfront Group AB # * † | 672,297 | 4,236,458 | ||||||
17,567,970 | ||||||||
Taiwan: 8.1% | ||||||||
Micro-Star International Co. Ltd. # | 2,170,000 | 10,008,413 |
Definitions: | |
ADR | American Depositary Receipt |
HKD | Hong Kong Dollar |
Footnotes: | |
† | Security fully or partially on loan. Total market value of securities on loan is $46,566,368. |
* | Non-income producing |
# | Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $266,847,011 which represents 42.3% of net assets. |
144A | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted $6,189,947, or 1.0% of net assets. |
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of
Investments |
Value | ||||||
Communication Services | 73.6 | % | $ | 464,246,042 | ||||
Consumer Discretionary | 4.8 | 30,250,555 | ||||||
Information Technology | 21.6 | 136,365,208 | ||||||
100.0 | % | $ | 630,861,805 |
See Notes to Financial Statements
26 |
|
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks | ||||||||||||||||
China | $ | 55,966,472 | $ | 57,087,081 | $ | — | $ | 113,053,553 | ||||||||
France | — | 17,099,717 | — | 17,099,717 | ||||||||||||
Japan | — | 128,510,576 | — | 128,510,576 | ||||||||||||
Poland | — | 9,937,283 | — | 9,937,283 | ||||||||||||
South Korea | — | 26,635,971 | — | 26,635,971 | ||||||||||||
Sweden | — | 17,567,970 | — | 17,567,970 | ||||||||||||
Taiwan | 41,258,961 | 10,008,413 | — | 51,267,374 | ||||||||||||
United States | 266,789,361 | — | — | 266,789,361 | ||||||||||||
Money Market Fund | 9,305,364 | — | — | 9,305,364 | ||||||||||||
Total Investments | $ | 373,320,158 | $ | 266,847,011 | $ | — | $ | 640,167,169 |
See Notes to Financial Statements
27 |
|
VANECK ETF TRUST
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 2021
Biotech ETF |
Digital
Transformation ETF |
Environmental
Services ETF |
Gaming ETF | |||||||||||||
Assets: | ||||||||||||||||
Investments, at value (1) | ||||||||||||||||
Unaffiliated issuers (2) | $ | 589,242,658 | $ | 45,578,244 | $ | 67,226,353 | $ | 118,236,406 | ||||||||
Short-term investments held as collateral for securities loaned (3) | — | 4,964,972 | 1,227,822 | 1,210,699 | ||||||||||||
Cash | 1,186,817 | 1,143,669 | 121,420 | 158,021 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | — | — | 8,189,958 | — | ||||||||||||
Shares of beneficial interest sold | 5,042,409 | — | 4,427,492 | 658 | ||||||||||||
Dividends and interest | 10,357 | 54,261 | 45,575 | 128,503 | ||||||||||||
Prepaid expenses | — | — | 2,100 | 3,150 | ||||||||||||
Total assets | 595,482,241 | 51,741,146 | 81,240,720 | 119,737,437 | ||||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 5,042,503 | 1,137,857 | 8,253,745 | — | ||||||||||||
Shares of beneficial interest redeemed | — | — | 4,362,412 | — | ||||||||||||
Collateral for securities loaned | — | 4,964,972 | 1,227,822 | 1,210,699 | ||||||||||||
Due to Adviser | 170,847 | 21,815 | 31,403 | 52,078 | ||||||||||||
Deferred Trustee fees | 64,926 | — | 3,589 | 8,813 | ||||||||||||
Accrued expenses | 83,552 | — | 68,200 | 76,444 | ||||||||||||
Total liabilities | 5,361,828 | 6,124,644 | 13,947,171 | 1,348,034 | ||||||||||||
NET ASSETS | $ | 590,120,413 | $ | 45,616,502 | $ | 67,293,549 | $ | 118,389,403 | ||||||||
Shares outstanding | 2,921,503 | 2,000,000 | 470,000 | 2,450,000 | ||||||||||||
Net asset value, redemption and offering price per share | $ | 201.99 | $ | 22.81 | $ | 143.18 | $ | 48.32 | ||||||||
Net Assets consist of: | ||||||||||||||||
Aggregate paid in capital | $ | 615,599,336 | $ | 57,095,368 | $ | 71,567,242 | $ | 132,017,344 | ||||||||
Total distributable earnings (loss) | (25,478,923) | (11,478,866) | (4,273,693) | (13,627,941) | ||||||||||||
NET ASSETS | $ | 590,120,413 | $ | 45,616,502 | $ | 67,293,549 | $ | 118,389,403 | ||||||||
(1) Value of securities on loan | $ | 24,961,286 | $ | 7,998,120 | $ | 3,719,858 | $ | 19,046,196 | ||||||||
(2) Cost of investments - Unaffiliated issuers | $ | 507,260,247 | $ | 54,684,650 | $ | 58,120,603 | $ | 117,538,290 | ||||||||
(3) Cost of short-term investments held as collateral for securities loaned | $ | — | $ | 4,964,972 | $ | 1,227,822 | $ | 1,210,699 |
See Notes to Financial Statements
28 |
|
VANECK ETF TRUST
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 2021
Pharmaceutical
ETF |
Retail ETF |
Semiconductor
ETF |
Video Gaming
and eSports ETF |
|||||||||||||
Assets: | ||||||||||||||||
Investments, at value (1) | ||||||||||||||||
Unaffiliated issuers (2) | $ | 318,065,051 | $ | 239,702,806 | $ | 5,930,116,986 | $ | 630,861,805 | ||||||||
Short-term investments held as collateral for securities loaned (3) | 17,187,701 | 293,092 | 86,922,750 | 9,305,364 | ||||||||||||
Cash | 167,317 | 7,850 | 5,025,946 | 105,930 | ||||||||||||
Cash denominated in foreign currency, at value (4) | — | — | — | 5,403,302 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | — | — | 179,426,084 | 362,254 | ||||||||||||
Shares of beneficial interest sold | 3,666,229 | — | 217,872,871 | 601 | ||||||||||||
Dividends and interest | 911,461 | 101,803 | 4,267,379 | 253,044 | ||||||||||||
Prepaid expenses | — | — | — | 5,250 | ||||||||||||
Total assets | 339,997,759 | 240,105,551 | 6,423,632,016 | 646,297,550 | ||||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 3,666,457 | — | 217,866,158 | 5,584,531 | ||||||||||||
Shares of beneficial interest redeemed | — | — | 179,430,840 | — | ||||||||||||
Collateral for securities loaned | 17,187,701 | 293,092 | 86,922,750 | 9,305,364 | ||||||||||||
Due to Adviser | 101,322 | 55,887 | 1,500,685 | 282,575 | ||||||||||||
Deferred Trustee fees | 36,037 | 10,259 | 97,454 | 9,660 | ||||||||||||
Accrued expenses | 67,875 | 71,421 | 203,122 | 115,147 | ||||||||||||
Total liabilities | 21,059,392 | 430,659 | 486,021,009 | 15,297,277 | ||||||||||||
NET ASSETS | $ | 318,938,367 | $ | 239,674,892 | $ | 5,937,611,007 | $ | 631,000,273 | ||||||||
Shares outstanding | 4,388,138 | 1,371,531 | 23,170,937 | 9,700,000 | ||||||||||||
Net asset value, redemption and offering price per share | $ | 72.68 | $ | 174.75 | $ | 256.25 | $ | 65.05 | ||||||||
Net Assets consist of: | ||||||||||||||||
Aggregate paid in capital | $ | 413,099,809 | $ | 253,485,607 | $ | 6,185,336,815 | $ | 559,469,711 | ||||||||
Total distributable earnings (loss) | (94,161,442) | (13,810,715) | (247,725,808) | 71,530,562 | ||||||||||||
NET ASSETS | $ | 318,938,367 | $ | 239,674,892 | $ | 5,937,611,007 | $ | 631,000,273 | ||||||||
(1) Value of securities on loan | $ | 21,722,584 | $ | 1,855,514 | $ | 87,531,989 | $ | 46,566,368 | ||||||||
(2) Cost of investments - Unaffiliated issuers | $ | 325,749,670 | $ | 243,244,076 | $ | 6,083,422,970 | $ | 579,029,696 | ||||||||
(3) Cost of short-term investments held as collateral for securities loaned | $ | 17,187,701 | $ | 293,092 | $ | 86,922,750 | $ | 9,305,364 | ||||||||
(4) Cost of cash denominated in foreign currency | $ | — | $ | — | $ | — | $ | 5,466,241 |
See Notes to Financial Statements
29 |
|
VANECK ETF TRUST
For the Year Ended September 30, 2021
Biotech ETF |
Digital
Transformation ETF (a) |
Environmental
Services ETF |
Gaming ETF | |||||||||||||
Income: | ||||||||||||||||
Dividends | $ | 3,012,996 | $ | 15,969 | $ | 376,963 | $ | 1,069,642 | ||||||||
Interest | — | — | 50 | 255 | ||||||||||||
Securities lending income | 47,903 | 83,172 | 40,788 | 60,281 | ||||||||||||
Foreign taxes withheld | — | (3,249) | (5,732) | (23,428) | ||||||||||||
Total income | 3,060,899 | 95,892 | 412,069 | 1,106,750 | ||||||||||||
Expenses: | ||||||||||||||||
Management fees | 1,851,610 | 92,680 | 251,107 | 584,280 | ||||||||||||
Professional fees | 53,468 | — | 50,642 | 52,348 | ||||||||||||
Custody and accounting fees | 36,116 | — | 30,829 | 56,474 | ||||||||||||
Reports to shareholders | 32,675 | — | 11,331 | 24,786 | ||||||||||||
IOPV fees | 1,192 | — | — | 1,509 | ||||||||||||
Trustees’ fees and expenses | 4,575 | — | 652 | 619 | ||||||||||||
Registration fees | 4,001 | — | 5,705 | 393 | ||||||||||||
Insurance | 15,838 | — | 2,201 | 2,513 | ||||||||||||
Interest | 10,792 | 290 | 475 | 2,653 | ||||||||||||
Other | 4,992 | — | 2,128 | 5,022 | ||||||||||||
Total expenses | 2,015,259 | 92,970 | 355,070 | 730,597 | ||||||||||||
Waiver of management fees | (154,118) | — | (78,229) | — | ||||||||||||
Net expenses | 1,861,141 | 92,970 | 276,841 | 730,597 | ||||||||||||
Net investment income | 1,199,758 | 2,922 | 135,228 | 376,153 | ||||||||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments | (24,416,406) | (2,364,313) | (155,063) | (886,045) | ||||||||||||
In-kind redemptions | 103,683,050 | 65,835 | 8,380,048 | 12,931,064 | ||||||||||||
Foreign currency transactions and foreign denominated assets and liabilities | — | (18,165) | (23) | (972) | ||||||||||||
Net realized gain (loss) | 79,266,644 | (2,316,643) | 8,224,962 | 12,044,047 | ||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments | 36,737,909 | (9,106,406) | 6,390,584 | (2,949,714) | ||||||||||||
Foreign currency transactions and foreign denominated assets and liabilities | — | — | — | (560) | ||||||||||||
Net change in unrealized appreciation (depreciation) | 36,737,909 | (9,106,406) | 6,390,584 | (2,950,274) | ||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 117,204,311 | $ | (11,420,127) | $ | 14,750,774 | $ | 9,469,926 |
(a) | For the period April 13, 2021 (commencement of operations) through September 30, 2021. |
See Notes to Financial Statements
30 |
|
VANECK ETF TRUST
STATEMENTS OF OPERATIONS
For the Year Ended September 30, 2021
Pharmaceutical
ETF |
Retail ETF |
Semiconductor
ETF |
Video Gaming
and eSports ETF |
|||||||||||||
Income: | ||||||||||||||||
Dividends | $ | 5,700,146 | $ | 2,739,929 | $ | 54,596,802 | $ | 4,826,056 | ||||||||
Interest | 56 | 77 | 1,013 | 260 | ||||||||||||
Securities lending income | 63,193 | 2,302 | 155,164 | 201,732 | ||||||||||||
Foreign taxes withheld | (147,132) | — | (2,970,022) | (484,235) | ||||||||||||
Total income | 5,616,263 | 2,742,308 | 51,782,957 | 4,543,813 | ||||||||||||
Expenses: | ||||||||||||||||
Management fees | 891,904 | 754,573 | 16,978,049 | 3,743,207 | ||||||||||||
Professional fees | 55,293 | 53,339 | 58,253 | 56,570 | ||||||||||||
Custody and accounting fees | 33,339 | 35,931 | 16,678 | 109,763 | ||||||||||||
Reports to shareholders | 17,084 | 27,964 | 311,785 | 115,377 | ||||||||||||
IOPV fees | 1,331 | 1,243 | 1,228 | 1,045 | ||||||||||||
Trustees’ fees and expenses | 3,027 | 2,690 | 105,774 | 10,936 | ||||||||||||
Registration fees | 8,095 | 8,564 | 60,601 | 40,006 | ||||||||||||
Insurance | 9,301 | 7,400 | 51,573 | 6,442 | ||||||||||||
Interest | 7,745 | 766 | 26,142 | 9,590 | ||||||||||||
Other | 3,312 | 2,865 | 37,548 | 9,386 | ||||||||||||
Total expenses | 1,030,431 | 895,335 | 17,647,631 | 4,102,322 | ||||||||||||
Waiver of management fees | (131,784) | (140,149) | (629,776) | — | ||||||||||||
Net expenses | 898,647 | 755,186 | 17,017,855 | 4,102,322 | ||||||||||||
Net investment income | 4,717,616 | 1,987,122 | 34,765,102 | 441,491 | ||||||||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments | (18,293,702) | (1,818,601) | (44,455,745) | 22,646,579 | ||||||||||||
In-kind redemptions | 34,382,583 | 56,606,575 | 1,705,736,191 | 75,126,692 | ||||||||||||
Foreign currency transactions and foreign denominated assets and liabilities | — | — | — | (23,520) | ||||||||||||
Net realized gain | 16,088,881 | 54,787,974 | 1,661,280,446 | 97,749,751 | ||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments | 20,215,746 | (23,437,570) | (254,053,014) | (77,263,466) | ||||||||||||
Foreign currency transactions and foreign denominated assets and liabilities | — | — | — | 6,279 | ||||||||||||
Net change in unrealized appreciation (depreciation) | 20,215,746 | (23,437,570) | (254,053,014) | (77,257,187) | ||||||||||||
Net Increase in Net Assets Resulting from Operations | $ | 41,022,243 | $ | 33,337,526 | $ | 1,441,992,534 | $ | 20,934,055 |
See Notes to Financial Statements
31 |
|
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Biotech ETF | Digital Transformation ETF | |||||||||||
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
Period Ended
September 30, 2021 (a) |
||||||||||
Operations: | ||||||||||||
Net investment income | $ | 1,199,758 | $ | 1,628,771 | $ | 2,922 | ||||||
Net realized gain (loss) | 79,266,644 | 3,573,293 | (2,316,643) | |||||||||
Net change in unrealized appreciation (depreciation) | 36,737,909 | 111,943,737 | (9,106,406) | |||||||||
Net increase (decrease) in net assets resulting from operations | 117,204,311 | 117,145,801 | (11,420,127) | |||||||||
Distributions to shareholders from: | ||||||||||||
Distributable earnings | (1,699,994) | (1,250,208) | — | |||||||||
Share transactions**: | ||||||||||||
Proceeds from sale of shares | 219,670,586 | 195,549,299 | 58,233,162 | |||||||||
Cost of shares redeemed | (230,504,701) | (144,293,768) | (1,196,533) | |||||||||
Increase (decrease) in net assets resulting from share transactions | (10,834,115) | 51,255,531 | 57,036,629 | |||||||||
Total increase in net assets | 104,670,202 | 167,151,124 | 45,616,502 | |||||||||
Net Assets, beginning of period | 485,450,211 | 318,299,087 | — | |||||||||
Net Assets, end of period | $ | 590,120,413 | $ | 485,450,211 | $ | 45,616,502 | ||||||
**Shares of Common Stock Issued (no par value) | ||||||||||||
Shares sold | 1,150,000 | 1,275,000 | 2,050,000 | |||||||||
Shares redeemed | (1,225,000) | (975,000) | (50,000) | |||||||||
Net increase (decrease) | (75,000) | 300,000 | 2,000,000 |
(a) | For the period April 13, 2021 (commencement of operations) through September 30, 2021. |
See Notes to Financial Statements
32 |
|
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Environmental Services ETF | Gaming ETF | |||||||||||||||
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
|||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 135,228 | $ | 159,675 | $ | 376,153 | $ | 467,263 | ||||||||
Net realized gain (loss) | 8,224,962 | (1,782,863) | 12,044,047 | (1,364,835) | ||||||||||||
Net change in unrealized appreciation (depreciation) | 6,390,584 | 239,751 | (2,950,274) | 8,615,747 | ||||||||||||
Net increase (decrease) in net assets resulting from operations | 14,750,774 | (1,383,437) | 9,469,926 | 7,718,175 | ||||||||||||
Distributions to shareholders from: | ||||||||||||||||
Distributable earnings | (124,993) | (165,025) | (349,965) | (800,020) | ||||||||||||
Share transactions**: | ||||||||||||||||
Proceeds from sale of shares | 40,559,653 | 12,786,779 | 90,865,077 | 33,435,454 | ||||||||||||
Cost of shares redeemed | (18,707,729) | (16,911,063) | (36,388,492) | (9,359,864) | ||||||||||||
Increase (decrease) in net assets resulting from share transactions | 21,851,924 | (4,124,284) | 54,476,585 | 24,075,590 | ||||||||||||
Total increase (decrease) in net assets | 36,477,705 | (5,672,746) | 63,596,546 | 30,993,745 | ||||||||||||
Net Assets, beginning of year | 30,815,844 | 36,488,590 | 54,792,857 | 23,799,112 | ||||||||||||
Net Assets, end of year | $ | 67,293,549 | $ | 30,815,844 | $ | 118,389,403 | $ | 54,792,857 | ||||||||
**Shares of Common Stock Issued (no par value) | ||||||||||||||||
Shares sold | 300,000 | 130,000 | 1,775,000 | 1,000,000 | ||||||||||||
Shares redeemed | (140,000) | (170,000) | (725,000) | (250,000) | ||||||||||||
Net increase (decrease) | 160,000 | (40,000) | 1,050,000 | 750,000 |
See Notes to Financial Statements
33 |
|
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Pharmaceutical ETF | Retail ETF | |||||||||||||||
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
|||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 4,717,616 | $ | 3,499,787 | $ | 1,987,122 | $ | 1,033,181 | ||||||||
Net realized gain | 16,088,881 | 4,349,184 | 54,787,974 | 7,270,080 | ||||||||||||
Net change in unrealized appreciation (depreciation) | 20,215,746 | 20,416,513 | (23,437,570) | 24,679,366 | ||||||||||||
Net increase in net assets resulting from operations | 41,022,243 | 28,265,484 | 33,337,526 | 32,982,627 | ||||||||||||
Distributions to shareholders from: | ||||||||||||||||
Distributable earnings | (4,063,401) | (3,321,670) | (1,274,964) | (950,056) | ||||||||||||
Share transactions**: | ||||||||||||||||
Proceeds from sale of shares | 506,408,386 | 388,323,148 | 278,009,892 | 145,515,451 | ||||||||||||
Cost of shares redeemed | (459,578,185) | (319,778,063) | (252,249,346) | (66,852,325) | ||||||||||||
Increase in net assets resulting from share transactions | 46,830,201 | 68,545,085 | 25,760,546 | 78,663,126 | ||||||||||||
Total increase in net assets | 83,789,043 | 93,488,899 | 57,823,108 | 110,695,697 | ||||||||||||
Net Assets, beginning of year | 235,149,324 | 141,660,425 | 181,851,784 | 71,156,087 | ||||||||||||
Net Assets, end of year | $ | 318,938,367 | $ | 235,149,324 | $ | 239,674,892 | $ | 181,851,784 | ||||||||
**Shares of Common Stock Issued (no par value) | ||||||||||||||||
Shares sold | 7,300,000 | 6,450,000 | 1,600,000 | 1,150,000 | ||||||||||||
Shares redeemed | (6,700,000) | (5,150,000) | (1,450,000) | (550,000) | ||||||||||||
Net increase | 600,000 | 1,300,000 | 150,000 | 600,000 |
See Notes to Financial Statements
34 |
|
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Semiconductor ETF | Video Gaming and eSports ETF | |||||||||||||||
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
Year Ended
September 30, 2021 |
Year Ended
2020 |
|||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 34,765,102 | $ | 24,886,743 | $ | 441,491 | $ | 103,970 | ||||||||
Net realized gain (loss) | 1,661,280,446 | 539,805,772 | 97,749,751 | (926,333) | ||||||||||||
Net change in unrealized appreciation (depreciation) | (254,053,014) | 193,386,180 | (77,257,187) | 126,217,297 | ||||||||||||
Net increase in net assets resulting from operations | 1,441,992,534 | 758,078,695 | 20,934,055 | 125,394,934 | ||||||||||||
Distributions to shareholders from: | ||||||||||||||||
Distributable earnings | (29,249,241) | (19,250,343) | (870,225) | (125,100) | ||||||||||||
Share transactions**: | ||||||||||||||||
Proceeds from sale of shares | 15,625,608,376 | 13,726,301,764 | 266,565,899 | 357,494,489 | ||||||||||||
Cost of shares redeemed | (13,747,005,339) | (13,179,602,021) | (177,196,989) | — | ||||||||||||
Increase in net assets resulting from share transactions | 1,878,603,037 | 546,699,743 | 89,368,910 | 357,494,489 | ||||||||||||
Total increase in net assets | 3,291,346,330 | 1,285,528,095 | 109,432,740 | 482,764,323 | ||||||||||||
Net Assets, beginning of year | 2,646,264,677 | 1,360,736,582 | 521,567,533 | 38,803,210 | ||||||||||||
Net Assets, end of year | $ | 5,937,611,007 | $ | 2,646,264,677 | $ | 631,000,273 | $ | 521,567,533 | ||||||||
**Shares of Common Stock Issued (no par value) | ||||||||||||||||
Shares sold | 66,350,000 | 99,350,000 | 3,850,000 | 7,350,000 | ||||||||||||
Shares redeemed | (58,350,000) | (95,600,000) | (2,650,000) | — | ||||||||||||
Net increase | 8,000,000 | 3,750,000 | 1,200,000 | 7,350,000 |
See Notes to Financial Statements
35 |
|
For a share outstanding throughout each year:
Biotech ETF | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | ||||||||||||||||
Net asset value, beginning of year | $ | 162.01 | $ | 118.04 | $ | 136.11 | $ | 134.17 | $ | 115.25 | ||||||||||
Net investment income (a) | 0.42 | 0.59 | 0.39 | 0.52 | 0.58 | |||||||||||||||
Net realized and unrealized gain (loss) on investments | 40.17 | 43.85 | (17.91 | ) | 2.10 | (b) | 18.67 | |||||||||||||
Total from investment operations | 40.59 | 44.44 | (17.52 | ) | 2.62 | 19.25 | ||||||||||||||
Distributions from: | ||||||||||||||||||||
Net investment income | (0.61 | ) | (0.47 | ) | (0.55 | ) | (0.68 | ) | (0.33 | ) | ||||||||||
Net asset value, end of year | $ | 201.99 | $ | 162.01 | $ | 118.04 | $ | 136.11 | $ | 134.17 | ||||||||||
Total return (c) | 25.13 | % | 37.71 | % | (12.84 | )% | 2.00 | % | 16.77 | % | ||||||||||
Ratios to average net assets | ||||||||||||||||||||
Gross expenses | 0.38 | % | 0.39 | % | 0.40 | % | 0.40 | % | 0.39 | % | ||||||||||
Net expenses | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | ||||||||||
Net investment income | 0.23 | % | 0.40 | % | 0.31 | % | 0.41 | % | 0.48 | % | ||||||||||
Supplemental data | ||||||||||||||||||||
Net assets, end of year (in millions) | $590 | $485 | $318 | $476 | $717 | |||||||||||||||
Portfolio turnover rate (d) | 41 | % | 40 | % | 24 | % | 30 | % | 27 | % |
(a) | Calculated based upon average shares outstanding |
(b) | The amount shown does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchase of shares in relation to fluctuating market values of the investments of the Fund. |
(c) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(d) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
36 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | For the period April 13, 2021 (commencement of operations) through September 30, 2021. |
(b) | Calculated based upon average shares outstanding |
(c) | Amount represents less than $0.005 per share. |
(d) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(e) | Not Annualized |
(f) | Annualized |
(g) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
37 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
(a) | Calculated based upon average shares outstanding |
(b) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(c) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
38 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
(a) | Calculated based upon average shares outstanding |
(b) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(c) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
39 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
(a) | Calculated based upon average shares outstanding |
(b) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(c) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
40 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
(a) | Calculated based upon average shares outstanding |
(b) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(c) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
41 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
(a) | Calculated based upon average shares outstanding |
(b) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(c) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
42 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | For the period October 16, 2018 (commencement of operations) through September 30, 2019. |
(b) | Calculated based upon average shares outstanding |
(c) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(d) | Not Annualized |
(e) | Annualized |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
43 |
|
VANECK ETF TRUST
September 30, 2021
Note 1—Fund Organization—VanEck ETF Trust (the “Trust”) (formerly known as VanEck Vectors ETF Trust) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust was incorporated in Delaware as a statutory trust on March 15, 2001. The Trust operates as a series fund, and offers multiple investment portfolios, each of which represents a separate series of the Trust. These financial statements relate only to the investment portfolios listed in the diversification table below (each a “Fund” and, collectively, the “Funds”).
Fund | Diversification Classification | |
Biotech ETF | Non-Diversified | |
Digital Transformation ETF | Non-Diversified | |
Environmental Services ETF | Non-Diversified | |
Gaming ETF | Non-Diversified | |
Pharmaceutical ETF | Non-Diversified | |
Retail ETF | Non-Diversified | |
Semiconductor ETF | Non-Diversified | |
Video Gaming and eSports ETF | Non-Diversified |
Each Fund was created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the common stocks in approximately the same weighting as their index.
Note 2—Significant Accounting Policies— The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
The Funds are investment companies and follow accounting and reporting requirements of Accounting Standards Codification (“ASC”) 946, Financial Services—Investment Companies.
The following summarizes the Funds’ significant accounting policies.
A. | Security Valuation— The Funds value their investments in securities and other assets and liabilities at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Securities traded on national exchanges are valued at the closing price on the markets in which the securities trade. Securities traded on the NASDAQ Stock Market LLC (“NASDAQ”) are valued at the NASDAQ official closing price. Over-the-counter securities not included on NASDAQ and listed securities for which no sale was reported are valued at the mean of the bid and ask prices. To the extent these securities are actively traded they are categorized as Level 1 in the fair value hierarchy (described below). Certain foreign securities, whose values may be affected by market direction or events occurring before the Funds’ pricing time (4:00 p.m. Eastern Time) but after the last close of the securities’ primary market, are fair valued using a pricing service and are categorized as Level 2 in the fair value hierarchy. The pricing service, using methods approved by the Board of Trustees, considers the correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant ADR’s and futures contracts. The Funds may also fair value securities in other situations, such as when a particular foreign market is closed but the Fund is open. Short-term debt securities with sixty days or less to maturity are valued at amortized cost, which with accrued interest approximates fair value. Money market fund investments are valued at net asset value and are considered as Level 1 in the fair value hierarchy. The Pricing Committee of Van Eck Associates Corporation (the “Adviser”) provides oversight of the Funds’ valuation policies and procedures, which are approved by the Funds’ Board of Trustees. Among other things, these procedures allow the Funds to utilize independent pricing services, quotations from securities dealers, and other market sources to determine fair value. The Pricing Committee convenes regularly to review the fair value of financial instruments or other assets. If market quotations for a security or other asset are not readily available, or if the Adviser believes they do not otherwise reflect the fair value of a security or asset, the security or asset will be fair valued by the Pricing Committee in accordance with the Funds’ valuation |
44 |
|
policies and procedures. The Pricing Committee employs various methods for calibrating the valuation approaches utilized to determine fair value, including a regular review of key inputs and assumptions, periodic comparisons to valuations provided by other independent pricing services, transactional back-testing and disposition analysis. | |
Certain factors such as economic conditions, political events, market trends, the nature of and duration of any restrictions on disposition, trading in similar securities of the issuer or comparable issuers and other security specific information are used to determine the fair value of these securities. Depending on the relative significance of valuation inputs, these securities may be categorized either as Level 2 or Level 3 in the fair value hierarchy. The price which the Funds may realize upon sale of an investment may differ materially from the value presented in the Schedules of Investments. | |
The Funds utilize various methods to measure the fair value of their investments on a recurring basis, which includes a hierarchy that prioritizes inputs to valuation methods used to measure fair value. The fair value hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The three levels of the fair value hierarchy are described below: | |
Level 1 — Quoted prices in active markets for identical securities. | |
Level 2 — Significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). | |
Level 3 — Significant unobservable inputs (including each Fund’s own assumptions in determining the fair value of investments). | |
A summary of the inputs and the levels used to value the Funds’ investments are located in the Schedules of Investments. Additionally, tables that reconcile the valuation of the Funds’ Level 3 investments and that present additional information about valuation methodologies and unobservable inputs, if applicable, are located in the Schedules of Investments. | |
B. | Federal Income Taxes— It is each Fund’s policy to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. |
C. | Distributions to Shareholders— Dividends to shareholders from net investment income and distributions from net realized capital gains, if any, are declared and paid annually by each Fund (except for dividends from net investment income on Pharmaceutical ETF, which are declared and paid quarterly). Income dividends and capital gain distributions are determined in accordance with U.S. income tax regulations, which may differ from such amounts determined in accordance with GAAP. |
D. | Currency Translation— Assets and liabilities denominated in foreign currencies and commitments under foreign currency contracts are translated into U.S. dollars at the closing prices of such currencies each business day as quoted by one or more sources. Purchases and sales of investments are translated at the exchange rates prevailing when such investments are acquired or sold. Foreign denominated income and expenses are translated at the exchange rates prevailing when accrued. The portion of realized and unrealized gains and losses on investments that result from fluctuations in foreign currency exchange rates is not separately disclosed in the financial statements. Such amounts are included with the net realized and unrealized gains and losses on investment securities in the Statements of Operations. Recognized gains or losses attributable to foreign currency fluctuations on foreign currency denominated assets, other than investments, and liabilities are recorded as net realized gain (loss) and net change in unrealized appreciation (depreciation) on foreign currency transactions and foreign denominated assets and liabilities in the Statements of Operations. |
45 |
|
VANECK ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
E. | Restricted Securities— The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Fund’s Schedule of Investments. |
F. | Offsetting Assets and Liabilities— In the ordinary course of business, the Funds enter into transactions subject to enforceable master netting or other similar agreements. Generally, the right of offset in those agreements allows the Funds to offset any exposure to a specific counterparty with any collateral received or delivered to that counterparty based on the terms of the agreements. The Funds may receive cash and or securities as collateral for securities lending. For financial reporting purposes, the Funds present securities lending assets and liabilities on a gross basis in the Statements of Assets and Liabilities. Cash collateral received for securities lending in the form of money market fund investments, if any, at September 30, 2021, is presented in the Schedules of Investments and in the Statements of Assets and Liabilities. Non-cash collateral is disclosed in Note 9 (Securities Lending). |
G. | Other— Security transactions are accounted for on trade date. Realized gains and losses are determined based on the specific identification method. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recognized upon notification of the ex-dividend date. Interest income, including amortization of premiums and discounts, is accrued as earned. |
The Funds earn interest income on uninvested cash balances held at the custodian bank. Such amounts, if any, are presented as interest income in the Statements of Operations. | |
The character of distributions received from certain investments may be comprised of net investment income, capital gains, and return of capital. It is the Funds’ policy to estimate the character of distributions received from these investments based on historical data if actual amounts are not available. After each calendar year end, these investments report the actual tax character of these distributions. Differences between the estimated and actual amounts are reflected in the Funds’ records in the year in which they are reported by adjusting the related cost basis of investments, capital gains and income, as necessary. | |
In the normal course of business, the Funds enter into contracts that contain a variety of general indemnifications. The Funds’ maximum exposure under these agreements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Adviser believes the risk of loss under these arrangements to be remote. |
Note 3—Investment Management and Other Agreements— The Adviser is the investment adviser to the Funds. The Adviser receives a management fee, calculated daily and payable monthly based on an annual rate of each Fund’s average daily net assets. The Adviser has agreed, until at least February 1, 2022, to waive management fees and assume expenses to prevent each Fund’s total annual operating expenses (excluding acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses) from exceeding the expense limitations listed in the table below.
The management fee rates and expense limitations for the year ended September 30, 2021, are as follows:
Fund |
Management
Fees |
Expense
Limitations |
||||||
Biotech ETF | 0.35 | % | 0.35 | % | ||||
Environmental Services ETF | 0.50 | 0.55 | ||||||
Gaming ETF | 0.50 | 0.65 | ||||||
Pharmaceutical ETF | 0.35 | 0.35 | ||||||
Retail ETF | 0.35 | 0.35 | ||||||
Semiconductor ETF | 0.35 | 0.35 | ||||||
Video Gaming and eSports ETF | 0.50 | 0.55 |
Refer to the Statements of Operations for amounts waived/assumed by the Adviser.
46 |
|
Digital Transformation ETF utilizes a unitary management fee structure where the Adviser is responsible for all Fund expenses, excluding the fee payment under the investment management agreement, acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses. Effective August 4, 2021, the unitary management fee rate for the Fund is 0.50% (prior to that date, the unitary management fee rate was 0.65%).
In addition, Van Eck Securities Corporation, an affiliate of the Adviser, acts as the Funds’ distributor (the “Distributor”). Certain officers and a Trustee of the Trust are officers, directors or stockholders of the Adviser and Distributor.
Note 4—Capital Share Transactions— As of September 30, 2021, there were an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Fund shares are not individually redeemable and are issued and redeemed at their net asset value per share only through certain authorized broker-dealers (“Authorized Participants”) in blocks of shares (“Creation Units”).
The consideration for the purchase or redemption of Creation Units of the Funds generally consists of the in-kind contribution or distribution of securities constituting the Funds’ underlying index (“Deposit Securities”) plus a balancing cash component to equate the transaction to the net asset value per share of the Fund on the transaction date. Cash may also be substituted in an amount equivalent to the value of certain Deposit Securities, generally as a result of market circumstances, or when the securities are not available in sufficient quantity for delivery, or are not eligible for trading by the Authorized Participant. The Funds may issue Creation Units in advance of receipt of Deposit Securities subject to various conditions, including, for the benefit of the Funds, a requirement to maintain cash collateral on deposit at the custodian equal to at least 115% of the daily marked to market value of the missing Deposit Securities
Authorized Participants purchasing and redeeming Creation Units may pay transaction fees directly to the transfer agent. In addition, the Funds may impose variable fees on the purchase or redemption of Creation Units for cash, or on transactions effected outside the clearing process, to defray certain transaction costs. These variable fees, if any, are reflected in share transactions in the Statements of Changes in Net Assets.
Note 5—Investments— For the year ended September 30, 2021, purchases and sales of investments (excluding short-term investments and in-kind capital share transactions) and purchases and sales of investments resulting from in-kind capital share transactions (excluding short-term investments) were as follows:
In-Kind Capital Share Transactions | ||||||||||||||||
Fund | Purchases | Sales | Purchases | Sales | ||||||||||||
Biotech ETF | $ | 216,407,908 | $ | 219,220,626 | $ | 211,009,606 | $ | 220,621,134 | ||||||||
Digital Transformation ETF | 19,116,563 | 17,749,923 | 56,811,273 | 1,194,785 | ||||||||||||
Environmental Services ETF | 11,138,126 | 10,586,218 | 40,519,827 | 18,780,261 | ||||||||||||
Gaming ETF | 25,414,430 | 22,623,665 | 86,473,521 | 34,746,055 | ||||||||||||
Pharmaceutical ETF | 50,433,213 | 49,557,997 | 493,062,108 | 446,279,307 | ||||||||||||
Retail ETF | 27,157,415 | 28,106,264 | 278,024,307 | 250,746,384 | ||||||||||||
Semiconductor ETF | 956,714,564 | 963,082,096 | 12,243,011,039 | 10,362,474,280 | ||||||||||||
Video Gaming and eSports ETF | 246,383,948 | 241,128,193 | 248,458,612 | 165,581,023 |
47 |
|
VANECK ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
Note 6—Income Taxes— As of September 30, 2021, for Federal income tax purposes, the identified cost, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) of investments owned were as follows:
Fund |
Tax Cost of
Investments |
Gross
Unrealized Appreciation |
Gross
Unrealized Depreciation |
Net Unrealized
Appreciation (Depreciation) |
||||||||||||
Biotech ETF | $ | 507,848,412 | $ | 112,857,745 | $ | (31,463,499 | ) | $ | 81,394,246 | |||||||
Digital Transformation ETF | 61,508,333 | 519,001 | (11,484,118 | ) | (10,965,117 | ) | ||||||||||
Environmental Services ETF | 59,353,572 | 10,958,914 | (1,858,311 | ) | 9,100,603 | |||||||||||
Gaming ETF | 119,926,644 | 19,519,206 | (19,998,745 | ) | (479,539 | ) | ||||||||||
Pharmaceutical ETF | 343,003,952 | 13,659,698 | (21,410,898 | ) | (7,751,200 | ) | ||||||||||
Retail ETF | 243,537,168 | 5,092,632 | (8,633,902 | ) | (3,541,270 | ) | ||||||||||
Semiconductor ETF | 6,170,592,931 | 146,472,175 | (300,025,370 | ) | (153,553,195 | ) | ||||||||||
Video Gaming and eSports ETF | 589,134,866 | 112,790,534 | (61,758,231 | ) | 51,032,303 |
At September 30, 2021, the components of distributable earnings (loss) on a tax basis, for each Fund, were as follows:
Fund |
Undistributed
Ordinary Income |
Accumulated
Capital Losses/ Undistributed Capital Gains |
Other
Temporary Differences |
Unrealized
Appreciation (Depreciation) |
Total
Distributable Earnings (Loss) |
|||||||||||||||
Biotech ETF | $ | 681,319 | $ | (107,489,562 | ) | $ | (64,926 | ) | $ | 81,394,246 | $ | (25,478,923 | ) | |||||||
Digital Transformation ETF | 1,632,489 | (2,146,231 | ) | (7 | ) | (10,965,117 | ) | (11,478,866 | ) | |||||||||||
Environmental Services ETF | 110,196 | (13,480,903 | ) | (3,589 | ) | 9,100,603 | (4,273,693 | ) | ||||||||||||
Gaming ETF | 564,611 | (13,704,532 | ) | (8,813 | ) | (479,207 | ) | (13,627,941 | ) | |||||||||||
Pharmaceutical ETF | 1,550,884 | (87,925,089 | ) | (36,037 | ) | (7,751,200 | ) | (94,161,442 | ) | |||||||||||
Retail ETF | 1,330,445 | (11,589,630 | ) | (10,259 | ) | (3,541,271 | ) | (13,810,715 | ) | |||||||||||
Semiconductor ETF | 25,320,876 | (119,396,034 | ) | (97,455 | ) | (153,553,195 | ) | (247,725,808 | ) | |||||||||||
Video Gaming and eSports ETF | 18,472,320 | 2,029,952 | (9,660 | ) | 51,037,950 | 71,530,562 |
The tax character of dividends paid to shareholders was as follows:
Fund |
2021
Ordinary Income |
2020
Ordinary Income |
||||||
Biotech ETF | $ | 1,699,994 | $ | 1,250,208 | ||||
Environmental Services ETF | 124,993 | 165,025 | ||||||
Gaming ETF | 349,965 | 800,020 | ||||||
Pharmaceutical ETF | 4,063,401 | 3,321,670 | ||||||
Retail ETF | 1,274,964 | 950,056 | ||||||
Semiconductor ETF | 29,249,241 | 19,250,343 | ||||||
Video Gaming and eSports ETF | 870,225 | 125,100 |
At September 30, 2021, the Funds had capital loss carryforwards available to offset future capital gains as follows:
Fund |
Short-Term
Capital Losses with No Expiration |
Long-Term
Capital Losses with No Expiration |
Total | |||||||||
Biotech ETF | $ | (10,178,101 | ) | $ | (97,311,461 | ) | $ | (107,489,562 | ) | |||
Digital Transformation ETF | (2,146,231 | ) | – | (2,146,231 | ) | |||||||
Environmental Services ETF | (4,409,984 | ) | (9,070,919 | ) | (13,480,903 | ) | ||||||
Gaming ETF | (3,351,540 | ) | (10,352,992 | ) | (13,704,532 | ) | ||||||
Pharmaceutical ETF | (4,203,891 | ) | (83,721,198 | ) | (87,925,089 | ) | ||||||
Retail ETF | (2,971,511 | ) | (8,618,119 | ) | (11,589,630 | ) | ||||||
Semiconductor ETF | (104,617,133 | ) | (14,778,901 | ) | (119,396,034 | ) |
During the year ended September 30, 2021, Video Gaming and eSports ETF utilized $890,112 of its capital loss carryforward available from prior years.
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|
During the period ended September 30, 2021, as a result of permanent book to tax differences primarily due to the tax treatment of in-kind redemptions, and the accumulated earnings applicable to the redemption of shares, the Funds incurred differences that affected distributable earnings (loss) and aggregate paid in capital by the amounts in the table below. Net assets were not affected by these reclassifications.
Fund |
Increase
(Decrease) in Total Distributable Earnings (Loss) |
Increase
(Decrease) in Aggregate Paid in Capital |
||||||
Biotech ETF | $ | (103,568,546 | ) | $ | 103,568,546 | |||
Digital Transformation ETF | (58,739 | ) | 58,739 | |||||
Environmental Services ETF | (8,378,563 | ) | 8,378,563 | |||||
Gaming ETF | (12,580,773 | ) | 12,580,773 | |||||
Pharmaceutical ETF | (33,962,321 | ) | 33,962,321 | |||||
Retail ETF | (56,586,756 | ) | 56,586,756 | |||||
Semiconductor ETF | (1,705,104,401 | ) | 1,705,104,401 | |||||
Video Gaming and eSports ETF | (76,537,801 | ) | 76,537,801 |
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by applicable tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on return filings for all open tax years. The Funds do not have exposure for additional years that might still be open in certain foreign jurisdictions. Therefore, no provision for income tax is required in the Funds’ financial statements. However, certain Funds are subject to foreign taxes on the appreciation in value of certain investments. The Funds provide for such taxes on both realized and unrealized appreciation.
The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the year ended September 30, 2021, the Funds did not incur any interest or penalties.
Note 7—Principal Risks— Non-diversified funds generally hold securities of fewer issuers than diversified funds (See Note 1) and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers. The Funds may purchase securities on foreign exchanges. Securities of foreign issuers involve special risks and considerations not typically associated with investing in U.S. issuers. These risks include devaluation of currencies, currency controls, less reliable information about issuers, different securities transaction clearance and settlement practices, future adverse economic developments and political conflicts, or natural or other disasters, such as the recent coronavirus outbreak. Additionally, certain Funds may invest in securities of emerging market issuers, which are exposed to a number of risks that may make these investments volatile in price or difficult to trade. Political risks may include unstable governments, nationalization, restrictions on foreign ownership, laws that prevent investors from getting their money out of a country, sanctions and investment restrictions and legal systems that do not protect property risks as well as the laws of the United States. These and other factors can make emerging market securities more volatile and potentially less liquid than securities issued in more developed markets. Certain securities of Chinese issuers are, or may in the future become restricted, and the Funds may be forced to sell such restricted securities and incur a loss as a result.
The respiratory disease caused by a novel coronavirus, which has spread internationally and declared as a pandemic by the World Health Organization, has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, loss of life, as well as general concern and uncertainty. The coronavirus has already negatively impacted the economies of many nations, individual companies, and the market. This pandemic is expected to have a continued impact in ways that cannot necessarily be foreseen presently.
A more complete description of risks is included in each Fund’s Prospectus and Statement of Additional Information.
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|
VANECK ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
Note 8—Trustee Deferred Compensation Plan—The Trust has a Deferred Compensation Plan (the “Plan”) for Trustees under which the Trustees can elect to defer receipt of their trustee fees until retirement, disability or termination from the Board of Trustees. The fees otherwise payable to the participating Trustees are deemed invested in shares of the Funds of the Trust as directed by the Trustees.
Except for the Digital Transformation ETF, the expense for the Plan is included in “Trustees’ fees and expenses” in the Statements of Operations, and the liability for the Plan is shown as “Deferred Trustee fees” in the Statements of Assets and Liabilities. The Adviser is responsible for paying the expenses associated with the Plan for the Digital Transformation ETF, and therefore the Fund bears no costs or liabilities relative to the Plan.
Note 9—Securities Lending— To generate additional income, each of the Funds may lend its securities pursuant to a securities lending agreement with the securities lending agent. Each Fund may lend up to 33% of its investments requiring that the loan be continuously collateralized by cash, cash equivalents, U.S. government securities, or any combination of cash and such securities at all times equal to at least 102% (105% for foreign securities) of the market value on the securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled on the next business day. During the term of the loan, the Funds will continue to receive any dividends, interest or amounts equivalent thereto, on the securities loaned while receiving a fee from the borrower and or earning interest on the investment of the cash collateral. Such fees and interest are shared with the securities lending agent under the terms of the securities lending agreement. Securities lending income is disclosed as such in the Statements of Operations. Cash collateral is maintained on the Funds’ behalf by the lending agent and is invested in the State Street Navigator Securities Lending Government Money Market Portfolio. Non-cash collateral consists of U.S. Treasuries and U.S. Government Agency securities, and is not disclosed in the Funds’ Schedules of Investments or Statements of Assets and Liabilities as it is held by the agent on behalf of the Funds. The Funds do not have the ability to re-hypothecate those securities. Loans are subject to termination at the option of the borrower or the Funds. Upon termination of the loan, the borrower will return to the Fund securities identical to the securities loaned. The Funds bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The value of loaned securities and related collateral, if any, at September 30, 2021 are presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities. The following is a summary of the Funds’ securities on loan and related collateral as of September 30, 2021:
Fund |
Market Value
of Securities on Loan |
Cash
Collateral |
Non-Cash
Collateral |
Total
Collateral |
||||||||||||
Biotech ETF | $ | 24,961,286 | $ | – | $ | 25,096,171 | $ | 25,096,171 | ||||||||
Digital Transformation ETF | 7,998,120 | 4,964,972 | 3,401,388 | 8,366,360 | ||||||||||||
Environmental Services ETF | 3,719,858 | 1,227,822 | 2,722,700 | 3,950,522 | ||||||||||||
Gaming ETF | 19,046,196 | 1,210,699 | 18,464,889 | 19,675,588 | ||||||||||||
Pharmaceutical ETF | 21,722,584 | 17,187,701 | 5,057,856 | 22,245,557 | ||||||||||||
Retail ETF | 1,855,514 | 293,092 | 1,714,740 | 2,007,832 | ||||||||||||
Semiconductor ETF | 87,531,989 | 86,922,750 | 1,856,281 | 88,779,031 | ||||||||||||
Video Gaming and eSports ETF | 46,566,368 | 9,305,364 | 41,750,251 | 51,055,615 |
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|
The following table presents money market fund investments held as collateral by type of security on loan as of September 30, 2021:
Gross Amount of
Recognized Liabilities for Securities Lending Transactions* in the Statements of Assets and Liabilities |
||||
Fund | Equity Securities | |||
Digital Transformation ETF | $ | 4,964,972 | ||
Environmental Services ETF | 1,227,822 | |||
Gaming ETF | 1,210,699 | |||
Pharmaceutical ETF | 17,187,701 | |||
Retail ETF | 293,092 | |||
Semiconductor ETF | 86,922,750 | |||
Video Gaming and eSports ETF | 9,305,364 |
* | Remaining contractual maturity: overnight and continuous |
Note 10—Bank Line of Credit— The Funds may participate in a $200 million committed credit facility (the “Facility”) to be utilized for temporary financing for the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of the Funds at the request of the shareholders and other temporary or emergency purposes. The Funds have agreed to pay commitment fees, pro rata, based on the unused but available balance. Interest is charged to the Funds based on prevailing market rates in effect at the time of borrowings. During the year ended September 30, 2021, the following Funds borrowed under this Facility:
Fund |
Days
Outstanding |
Average
Daily Loan Balance |
Average
Interest Rate |
|||||||||
Biotech ETF | 51 | $ | 2,100,695 | 1.43 | % | |||||||
Digital Transformation ETF | 11 | 680,180 | 1.44 | |||||||||
Environmental Services ETF | 10 | 249,349 | 1.45 | |||||||||
Gaming ETF | 55 | 370,629 | 1.43 | |||||||||
Pharmaceutical ETF | 295 | 549,212 | 1.44 | |||||||||
Retail ETF | 10 | 102,594 | 1.46 | |||||||||
Semiconductor ETF | 191 | 2,241,609 | 1.44 | |||||||||
Video Gaming and eSports ETF | 178 | 1,181,963 | 1.43 |
Outstanding loan balances as of September 30, 2021, if any, are reflected in the Statements of Assets and Liabilities.
Note 11—Subsequent Event Review— The Funds have evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements were issued. Effective October 1, 2021, the Funds listed in the table below converted to a unitary management fee structure, pursuant to which the Adviser has agreed to pay all of the expenses of each Fund (excluding the fee payment under the investment management agreement, acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes, and extraordinary expenses).
Fund |
Unitary
Management Fee Rate |
|||
Biotech ETF | 0.35 | % | ||
Pharmaceutical ETF | 0.35 | |||
Retail ETF | 0.35 | |||
Semiconductor ETF | 0.35 |
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VANECK ETF TRUST
Report of Independent Registered Public Accounting Firm
To the Shareholders of VanEck Biotech ETF, VanEck Digital Transformation ETF, VanEck Environmental Services ETF, VanEck Gaming ETF, VanEck Pharmaceutical ETF, VanEck Retail ETF, VanEck Semiconductor ETF and VanEck Video Gaming and eSports ETF and the Board of Trustees of VanEck ETF Trust
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of VanEck Biotech ETF, VanEck Digital Transformation ETF, VanEck Environmental Services ETF, VanEck Gaming ETF, VanEck Pharmaceutical ETF, VanEck Retail ETF, VanEck Semiconductor ETF and VanEck Video Gaming and eSports ETF (collectively referred to as the “Funds”) (eight of the series constituting VanEck ETF Trust (the “Trust”)), including the schedules of investments, as of September 30, 2021, and the related statements of operations, changes in net assets, and the financial highlights for each of the periods indicated in the table below and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds (eight of the series constituting VanEck ETF Trust) as of September 30, 2021, and the results of their operations, changes in net assets and financial highlights for each of the periods indicated in the table below, in conformity with U.S. generally accepted accounting principles.
Individual fund constituting
the VanEck ETF Trust |
Statement of
operations |
Statements of changes in net
assets |
Financial highlights | ||||
VanEck Biotech ETF
VanEck Environmental Services ETF
VanEck Gaming ETF
VanEck Pharmaceutical ETF
VanEck Retail ETF
VanEck Semiconductor ETF |
For the year ended September 30, 2021 | For each of the two years in the period ended September 30, 2021 | For each of the five years in the period ended September 30, 2021 | ||||
VanEck Digital Transformation ETF | For the period from April 13, 2021 (commencement of operations) through September 30, 2021 | For the period from April 13, 2021 (commencement of operations) through September 30, 2021 | For the period from April 13, 2021 (commencement of operations) through September 30, 2021 | ||||
VanEck Video Gaming and eSports ETF | For the year ended September 30, 2021 | For each of the two years in the period ended September 30, 2021 | For each of the two years in the period ended September 30, 2021 and the period October 16, 2018 (commencement of operations) through September 30, 2019 |
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on each of the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
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plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2021, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from broker were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more of the VanEck investment companies since 1999.
New York, New York
November 19, 2021
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VANECK ETF TRUST
(unaudited)
The information set forth below relates to distributions paid during each Fund’s current fiscal year as required by federal laws. Shareholders, however, must report dividends on a calendar year basis for income tax purposes, which may include dividends for portions of two fiscal years of a Fund.
Accordingly, the information needed by shareholders for calendar year 2021 income tax purposes will be sent to them in early 2022. Please consult your tax advisor for proper treatment of this information.
The following information is provided with respect to the distributions paid during the taxable year ended September 30, 2021:
* | Expressed as a percentage of the cash distribution grossed up for foreign taxes. |
** The foreign taxes paid represent taxes incurred by the Fund on income received by the Fund from foreign sources. Foreign taxes paid may be included in taxable income with an offsetting deduction from gross income or may be taken as a credit for taxes paid to foreign governments. You should consult your tax advisor regarding the appropriate treatment of foreign taxes paid.
Please retain this information for your records.
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|
VANECK ETFs
BOARD OF TRUSTEES AND OFFICERS
September 30, 2021 (unaudited)
Name, Address1
and Year of Birth |
Position(s)
Held with the Trust |
Term of
Office2 and Length of Time Served |
Principal Occupation(s)
During Past Five Years |
Number
of
Portfolios in Fund Complex3 Overseen |
Other Directorships Held
By Trustee During Past Five Years |
|||||
Independent Trustees | ||||||||||
David H. Chow,
1957*† |
Chairman Trustee |
Since 2008
Since 2006 |
Founder and CEO, DanCourt Management LLC (financial/ strategy consulting firm and Registered Investment Adviser), March 1999 to present. | 60 | Trustee, Berea College of Kentucky, May 2009 to present and currently Chairman of the Investment Committee; Member of the Governing Council of the Independent Directors Council, October 2012 to September 2020; Trustee, MainStay Fund Complex4, January 2016 to present and currently Chairman of the Risk and Compliance Committee. | |||||
Laurie A. Hesslein,
1959*† |
Trustee | Since 2019 | Citigroup, Managing Director, and Business Head, Local Consumer Lending North America, and CEO and President, CitiFinancial Servicing LLC (2013 - 2017). | 60 | Trustee, First Eagle Senior Loan Fund. Formerly, Trustee, Eagle Growth and Income Opportunities Fund, March 2017 to December 2020. | |||||
R. Alastair Short,
1953*† |
Trustee | Since 2006 | President, Apex Capital Corporation (personal investment vehicle). | 72 | Chairman and Independent Director, EULAV Asset Management; Trustee, Kenyon Review; Trustee, Children’s Village. Formerly, Independent Director, Tremont offshore funds. | |||||
Peter J. Sidebottom,
1962*† |
Trustee | Since 2012 | Lead Partner, North America Banking and Capital Markets Strategy, Accenture, May 2017 to present; Partner, PWC/Strategy & Financial Services Advisory, February 2015 to March 2017; Founder and Board Member, AspenWoods Risk Solutions, September 2013 to February 2016; Independent consultant, June 2013 to February 2015; Partner, Bain & Company (management consulting firm), April 2012 to December 2013; Executive Vice President and Senior Operating Committee Member, TD Ameritrade (on-line brokerage firm), February 2009 to January 2012. | 60 | Board Member, Special Olympics, New Jersey, November 2011 to September 2013; Director, The Charlotte Research Institute, December 2000 to 2009; Board Member, Social Capital Institute, University of North Carolina Charlotte, November 2004 to January 2012; Board Member, NJ-CAN, July 2014 to 2016. | |||||
Richard D. Stamberger,
1959*† |
Trustee | Since 2006 | Senior Vice President, B2B, Future Plc (global media company), July 2020 to present; President, CEO and co-founder, SmartBrief, Inc., 1999 to 2019. | 72 | Director, Food and Friends, Inc., 2013 to present. | |||||
Interested Trustee | ||||||||||
Jan F. van Eck,
19635 |
Trustee, Chief Executive Officer and President | Trustee (Since 2006); Chief Executive Officer and President (Since 2009) | Director, President and Chief Executive Officer of Van Eck Associates Corporation (VEAC), Van Eck Absolute Return Advisers Corporation (VEARA) and Van Eck Securities Corporation (VESC); Officer and/or Director of other companies affiliated with VEAC and/or the Trust | 72 | Director, National Committee on US-China Relations. |
1 | The address for each Trustee and officer is 666 Third Avenue, 9th Floor, New York, New York 10017. |
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VANECK ETFs
BOARD OF TRUSTEES AND OFFICERS (unaudited) (continued)
2 | Each Trustee serves until resignation, death, retirement or removal. Officers are elected yearly by the Trustees. |
3 | The Fund Complex consists of the VanEck Funds, VanEck VIP Trust and the Trust. |
4 | The MainStay Fund Complex consists of MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust and MainStay MacKay Defined Term Municipal Opportunities Fund. |
5 | “Interested person” of the Trust within the meaning of the 1940 Act. Mr. van Eck is an officer of VEAC, VEARA and VESC. |
* | Member of the Audit Committee. |
† | Member of the Nominating and Corporate Governance Committee. |
Officer’s
Name,
Address1 and Year of Birth |
Position(s)
Held with the Trust |
Term
of Office2
And Length of Time Served |
Principal Occupation(s) During Past Five Years | |||
Officer Information | ||||||
Matthew A. Babinsky,
1983 |
Assistant Vice President and Assistant Secretary | Since 2016 | Assistant Vice President, Assistant General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Associate, Clifford Chance US LLP. | |||
Russell G. Brennan,
1964 |
Assistant Vice President and Assistant Treasurer | Since 2008 | Assistant Vice President of VEAC; Officer of other investment companies advised by VEAC and VEARA. | |||
Charles T. Cameron,
1960 |
Vice President | Since 2006 | Portfolio Manager of VEAC; Officer and/or Portfolio Manager of other investment companies advised by VEAC and VEARA. Formerly, Director of Trading of VEAC. | |||
John J. Crimmins,
1957 |
Vice President, Treasurer, Chief Financial Officer and Principal Accounting Officer | Vice President, Chief Financial Officer and Principal Accounting Officer (Since 2012); Treasurer (Since 2009) | Vice President of VEAC and VEARA; Officer of other investment companies advised by VEAC and VEARA. Formerly, Vice President of VESC. | |||
Eduardo Escario,
1975 |
Vice President | Since 2012 | Regional Director, Business Development/Sales for Southern Europe and South America of VEAC. | |||
F. Michael Gozzillo,
1965 |
Chief Compliance Officer | Since 2018 | Vice President and Chief Compliance Officer of VEAC and VEARA; Chief Compliance Officer of VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Chief Compliance Officer of City National Rochdale, LLC and City National Rochdale Funds. | |||
Laura Hamilton,
1977 |
Vice President | Since 2019 | Assistant Vice President of VEAC and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Operations Manager of Royce & Associates. | |||
Nicholas Jackson,
1974 |
Assistant Vice President | Since 2018 | Director, Business Development of VanEck Australia Pty Ltd. Formerly, Vice President, Business Development of VanEck Australia Pty Ltd. | |||
Laura I. Martínez,
1980 |
Vice President and Assistant Secretary | Vice President (Since 2016); Assistant Secretary (Since 2008) | Vice President, Associate General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Assistant Vice President of VEAC, VEARA and VESC. | |||
Matthew McKinnon,
1970 |
Assistant Vice President | Since 2018 | Head of Business Development of Asia Pacific of VanEck Australia Pty Ltd. Formerly, Director, Intermediaries and Institutions of VanEck Australia Pty Ltd. | |||
Arian Neiron,
1979 |
Vice President | Since 2018 | Managing Director and Head of Asia Pacific of VanEck Australia Pty Ltd.; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. | |||
James Parker,
1969 |
Assistant Treasurer | Since 2014 | Assistant Vice President of VEAC; Manager, Portfolio Administration of VEAC and VEARA. Officer of other investment companies advised by VEAC and VEARA. | |||
Adam Phillips,
1970 |
Vice President | Since 2018 | ETF Chief Operating Officer of VEAC; Director of other companies affiliated with VEAC. | |||
Philipp Schlegel,
1974 |
Vice President | Since 2016 | Managing Director of Van Eck Switzerland AG. |
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Jonathan R. Simon, 1974 | Senior Vice President, Secretary and Chief Legal Officer | Senior Vice President (Since 2016); Secretary and Chief Legal Officer (since 2014) | Senior Vice President, General Counsel and Secretary of VEAC, VEARA and VESC; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. Formerly, Vice President of VEAC, VEARA and VESC. | |||
Andrew Tilzer, 1972 | Assistant Vice President | Since 2021 | Vice President of Portfolio Administration of VEAC. Formerly, Assistance Vice President, Portfolio Operations of VEAC. |
1 | The address for each Officer is 666 Third Avenue, 9th Floor, New York, New York 10017. |
2 | Officers are elected yearly by the Trustees. |
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VANECK ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2021 (unaudited)
At a meeting held on June 17, 2021 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of VanEck® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved the continuation of the investment management agreements between the Trust and Van Eck Associates Corporation (the “Adviser”) (the “Investment Management Agreements”) with respect to the VanEck Biotech ETF, Digital Transformation ETF, Environmental Services ETF, Gaming ETF, Long/Flat Trend ETF, Morningstar Durable Dividend ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF, Morningstar Wide Moat ETF, Pharmaceutical ETF, Retail ETF, Semiconductor ETF, Social Sentiment ETF and Video Gaming and eSports ETF (each, a “Fund” and together, the “Funds”).
The Board’s approval of the Investment Management Agreements was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.
In preparation for the Renewal Meeting, the Trustees held a meeting on May 7, 2021 (the “May Meeting”). At that meeting, the Trustees discussed the information the Adviser and Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party data provider, had provided to them in advance. The information provided to the Trustees included, among other things, information about the performance and expenses of the Funds and the Funds’ peer funds (certain other index-based exchange-traded funds (“ETFs”)), information about the advisory services provided to the Funds and the personnel providing those services, and the profitability and other benefits enjoyed by the Adviser and its affiliates as a result of the Adviser’s relationship with the Funds. In reviewing performance information for the Funds against their peer groups, the Trustees considered that each Fund seeks to track a different index than the funds in its designated peer group and, therefore, each Fund’s performance will differ from its peers. They also considered the fact that each of the VanEck Digital Transformation ETF and Social Sentiment ETF had only recently commenced operations and therefore each had a limited operational history that could be used for comparative purposes, since tracking error measurements and the performance comparisons provided by Broadridge were not available for each Fund, while the expense information prepared by Broadridge was only available for the VanEck Social Sentiment ETF. In addition, as noted below, the Trustees reviewed certain performance information for each Fund which was not provided by Broadridge and which did not compare each Fund’s performance to the performance of its peer group. The Trustees noted that the peer group performance information did not necessarily provide meaningful direct comparisons to the Funds.
The Independent Trustees’ consideration of the Investment Management Agreements was based, in part, on their review of information obtained through discussions with the Adviser at the Renewal Meeting and with the Adviser at the May Meeting regarding the management of the Funds and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others involved in the management and administration of the Funds. The Trustees also considered the terms of, and scope of services that the Adviser provides under, the Investment Management Agreements, including, where applicable, the Adviser’s commitment to waive certain fees and/or pay expenses of each of the Funds to the extent necessary to prevent the operating expenses of each of the Funds from exceeding agreed upon limits for a period of time.
The Trustees concluded that the Adviser and its personnel have the requisite expertise and skill to manage the Funds’ portfolios. In evaluating the performance of each Fund, the Trustees reviewed various performance metrics but relied principally on a comparison of the “gross” performance of each Fund (i.e., measured without regard to the impact of fees and expenses) to the performance of its benchmark index, in each case incorporating any systematic fair value adjustments to the underlying securities. Based on the foregoing, the Trustees concluded that the investment performance of the Funds was satisfactory.
The Trustees also considered information relating to the financial condition of the Adviser and the current status, as they understood it, of the Adviser’s compliance environment.
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As noted above, the Trustees were also provided various data from Broadridge comparing the Funds’ expenses and performance to that of certain other ETFs. The Trustees noted that the information provided showed that each Fund had management fees (after the effect of any applicable fee waiver) below the average and median of its respective peer group of funds, except for the VanEck Morningstar Wide Moat ETF and Social Sentiment ETF, each of which had management fees (after the effect of any applicable fee waiver) above the average and median of its peer group of funds. The Trustees also noted that the information provided showed that each Fund (except as noted below) had a total expense ratio (after the effect of any applicable expense limitation) below the average and median of its respective peer group of funds and the VanEck Environmental Services ETF had a total expense ratio (after the effect of any applicable expense limitation) below the average and equal to the median of its peer group of funds, while each of the VanEck Gaming ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF and Morningstar Wide Moat ETF had a total expense ratio (after the effect of any applicable expense limitation) greater than the average and median of its respective peer group of funds and the VanEck Social Sentiment ETF had a total expense ratio (after the effect of any applicable expense limitation) greater than the average and equal to the median of its peer group of funds. The Trustees reviewed the amount by which certain Funds’ management fees and/or total expense ratios (after the effect of any applicable expense limitation) exceeded the average and/or median of their respective peer groups and information provided by the Adviser providing context for these comparisons. The Trustees concluded, in light of this information and the other information available to them, that the fees paid by the Funds were reasonable in light of the performance of the Funds and the quality of services received.
The Trustees also considered the benefits, other than the fees under the Investment Management Agreements, received by the Adviser from serving as adviser to the Funds.
The Trustees also considered information provided by the Adviser about the overall profitability of the Adviser and its profitability or loss in respect of each Fund. The Trustees reviewed each Fund’s asset size, expense ratio and expense cap and noted that the Investment Management Agreements do not include breakpoints in the advisory fee rates as asset levels in a Fund increase. The Trustees considered the volatility of the asset classes in which certain of the Funds invest, potential variability in the net assets of these Funds and the sustainability of any potential economies of scale which may exist given where fees are currently set. The Trustees also evaluated the extent to which management fees for the Funds effectively incorporate the benefits of economies of scale. The Trustees noted that the Adviser has capped expenses on each Fund since its inception, although the cap was not necessarily exceeded each year. Based on the foregoing and the other information available to them, the Trustees determined that the advisory fee rate for each Fund is reasonable and appropriate in relation to the current asset size of each Fund and the other factors discussed above and that the advisory fee rate for each Fund currently reflects an appropriate sharing with shareholders of any economies of scale which may exist. The Trustees also determined that the profits earned by the Adviser with respect to the Funds that were profitable to the Adviser were reasonable in light of the nature and quality of the services received by such Funds.
The Independent Trustees were advised by and met in executive session with their independent counsel at the Renewal Meeting and at their May Meeting as part of their consideration of the Investment Management Agreements.
Subsequent to the approval of the Investment Management Agreements at the Renewal Meeting, at a meeting held on September 14, 2021 (the “September Meeting”), the Board of the Trust, including all of the Independent Trustees, approved amended and restated Investment Management Agreements (the “Amended and Restated Investment Management Agreements”) between the Trust and the Adviser to (i) convert the VanEck Biotech ETF, VanEck Pharmaceutical ETF, VanEck Retail ETF, VanEck Semiconductor ETF and VanEck Morningstar Durable Dividend ETF (each, a “Converting Fund”) to a unitary fee structure, pursuant to which the Adviser will pay all of the direct expenses of each Converting Fund (excluding fees under the Amended and Restated Investment Management Agreement, acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses) in exchange for an annual unitary management fee rate equal to the existing management fee rate for each Converting Fund, and (ii) to reduce
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VANECK ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2021 (unaudited) (continued)
the unitary management fee rate with respect to the VanEck Digital Transformation ETF. The Investment Management Agreements and the Amended and Restated Investment Management Agreements are collectively referred to as the “Agreements.”
The Board’s approval of the Amended and Restated Investment Management Agreements was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. In approving the Amended and Restated Investment Agreement, the Trustees also considered the information about the expenses of each Converting Fund and VanEck Digital Transformation ETF they received at the Renewal Meeting to approve the Investment Management Agreements, as well as additional information obtained at other meetings of the Board. Some of the additional 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.
Among other things, the Trustees considered the terms and scope of services that the Adviser would provide under the Amended and Restated Investment Management Agreements and representations from the Adviser that the services to be provided by the Adviser to the Converting Funds and VanEck Digital Transformation ETF would not decrease in scope or quality under the unitary fee structure or the reduced unitary management fee rate, respectively. The Trustees also considered the risks being assumed by the Adviser under the unitary fee structure and the potential expense stability that may inure to the benefit of shareholders of the Converting Funds.
The Independent Trustees were advised by and met in executive session with their independent counsel at their September Meeting as part of their consideration of the Amended and Restated Investment Management Agreements.
In voting to approve the continuation of the Investment Management Agreements and the adoption of the Amended and Restated Investment Management Agreements, the Trustees, including the Independent Trustees, concluded that the terms of each 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, at the time of their considerations, each Agreement is in the best interest of each Fund and such Fund’s shareholders.
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This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by a VanEck 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: | VanEck Associates Corporation | |
Distributor: |
VanEck Securities Corporation
666 Third Avenue, New York, NY 10017 vaneck.com |
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Account Assistance: | 800.826.2333 | INDUSAR |
|
ANNUAL
REPORT
September 30, 2021 |
800.826.2333 | vaneck.com |
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Certain information contained in this report represents the opinion of the investment adviser which may change at any time. This information is not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue. The information contained herein regarding each index has been provided by the relevant index provider. Also, unless otherwise specifically noted, any discussion of the Funds’ holdings, the Funds’ performance, and the views of the investment adviser are as of September 30, 2021.
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VANECK ETFs
September 30, 2021
(unaudited)
Dear Fellow Shareholders:
This letter addresses two topics: first, the risks to the markets today and, second, two multi-year themes.
The Economy
When we think about financial markets, since the future remains unknown, we seek to identify potential scenarios. At the beginning of this year, the global economy was like a car hurtling forward at 200 miles per hour. Over the summer, we expected an orderly slowdown, asking only “What are the risks to Goldilocks?”1 We thought the car could slow to 70 miles per hour without putting too much pressure on interest rates, driven by inflation, which would upset the financial markets. The markets today are pondering the question, “Are we hitting the brakes too hard?” I think not.
In the U.S., will the U.S. Federal Reserve (Fed) hit the brakes too hard? I don’t think so. First, while the financial markets are still debating whether we have an inflation problem, I don’t think we will know whether we have permanent inflation until late next year. It is true that we are talking about supply chain issues and labor market issues longer than the transitory camp would like. But while commodity price inflation matters, the real concern about inflation and financial markets is wage inflation, since it tends to be longer-lasting and may affect long-term interest rates.
Second, if inflation doesn’t push rates higher, I don’t think the Fed will hit the brakes too hard by raising rates. Bank of America recently released a research note2 that said over half of the S&P 500® Index’s returns in the past decade can be attributed to the Fed’s balance sheet expansion, rather than earnings. We live in an era in which the Fed has an eye on the financial markets. Why would that change?
What about China? Will real estate or other factors like COVID-19 cause a recession? While China growth is becoming soggy, we think policy makers have all the tools, including liquidity moves, to avoid a crash.
Multi-Year Investment Themes
So what to do in your portfolio? We are focusing on two multi-year investment themes.
The first theme is the energy transition away from fossil fuels. We see this not only as being driven by government policy, but also by innovation in the private sector. In our resources portfolios, we’re looking for disruptive companies in the sectors that need to be more energy efficient. One is agriculture (which emits about as much CO2 as the energy sector). AgTech businesses are embracing technology to modernize agriculture, leading to higher crop yields, safer crop chemicals and other innovations in food production to provide healthy diets for the world’s growing population.
The second theme is the use of blockchain in a large variety of industries, but especially finance and entertainment. New open-source database technology is enabling incredibly rapid adoption and at much lower cost than traditional companies using prior generation technology. The fintech revolution that goes hand in hand with crypto is something we find really exciting. There are some over-valued companies, but we think it’s another interesting multi-year trend that investors should consider.
Another surprise that has affected commodity prices is that, as the economy grows and demand for commodities grows, increasing supply has become harder. This is in part due to environmental, social and governance (ESG) policies in place, causing “greenflation” and a multi-year trend of price pressure. Finding supply sources like new copper, lithium or gold mines is harder because of, to a certain extent, the environmental impact of these activities. I think this supply issue will continue to underpin commodity prices, and is why I believe that commodity equities are an interesting investment that people should have in their portfolios.
We sincerely thank you for investing in VanEck’s investment strategies. On the following pages, you will find a performance discussion and financial statements for each of the funds for the twelve month period ended September, 2021. As always, we value your continued confidence in us and look forward to helping you meet your investment goals in the future.
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VANECK ETFs
PRESIDENT’S LETTER
(unaudited) (continued)
Jan F. van Eck
CEO and President
VanEck ETF Trust
October 18, 2021
1 A Goldilocks economy is an economy that is not so hot that it causes inflation and not so cold that it causes a recession.
2 Source: Bloomberg, https://www.bloomberg.com/news/articles/2021-09-08/bofa-s-subramanian-dumps-dire-stock-call-to-catch-up-with-rally
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VANECK ETFs
September 30, 2021 (unaudited)
Market Review
Inflation Allocation
In its pursuit of long-term total return, VanEck Inflation Allocation ETF (RAAX®) (formerly VanEck Real Asset Allocation ETF) seeks to maximize real returns, while seeking to reduce downside risk during sustained market declines. The Fund seeks to achieve this by allocating primarily to exchange-traded products that provide exposure to real assets, which include commodities, real estate, natural resources, master limited partnerships (MLPs) and infrastructure. The Fund seeks to reduce downside risk by using a rules-based approach to determine when to allocate to cash and cash equivalents.
Over the 12 month period, the Fund returned +34.11%. Resources assets and, in particular, diversified commodities, contributed by far the most positively to the Fund’s total return. Financial assets, in the form, of gold and gold mining stocks detracted the most from performance, but, even then, not significantly.
Long/Flat Trend
VanEck Long/Flat Trend ETF (LFEQ®) returned +29.29% in the 12 month period ended September 30, 2021. The Fund takes a guided allocation approach designed to help investors manage risk in the U.S. equity market. The Fund seeks to track the Ned Davis Research CMG US Large Cap Long/Flat Index (NDRCMGLF) from Ned Davis Research (NDR), a world-renowned provider of institutional quality research. It is a rules-based index that follows a proprietary model developed by NDR and CMG Capital Management Group, Inc. (CMG).
The model measures the overall health of the market through an evaluation of market breadth. In this case, market breadth refers to advancing and declining price trends and countertrends at the GICS®1 industry group level. The model computes a robust moving average score daily to capture multi-industry and multi-term trend and countertrend measures to gauge overall market health. It then calculates the score’s directional trend to see if it is improving or declining. Collectively, the score and its directional trend determine the equity allocation of either 100%, 50%, or 0%. At 0%, the allocation would be entirely to cash.
The model’s long-term trend indicators remained bullish throughout the period under review and kept it fully invested, which allowed the Fund to fully participate in the market. The Fund’s allocation to equities remained unchanged over the 12 month period.2
Morningstar Durable Dividend
VanEck Morningstar Durable Dividend ETF (DURA®) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® US Dividend Valuation IndexSM (MSUSDVTU). The index is intended to track the overall performance of high dividend yielding U.S. companies with strong financial health and attractive valuations according to Morningstar.
The Fund returned +17.89% over the 12 month period under review. The consumer staples, financial and health care sectors were the top contributors to performance. While not one sector detracted from performance for the period, the communications services, materials and energy sectors contributed the least to performance.
Morningstar Global Wide Moat
VanEck Morningstar Global Wide Moat ETF (GOAT®) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® Global Wide Moat Focus IndexSM (MSGWMFNU). The index is intended to track the overall performance of global companies with sustainable competitive advantages, i.e., “moats,” and attractive valuations according to Morningstar’s equity research team. The index contains at least 50 stocks that are reviewed each quarter.
VanEck Morningstar Global Wide Moat ETF returned +22.99% for the 12 month period under review. The information technology, industrial and communication services sectors contributed most to performance. The utilities sector was the only sector to detract from performance and then only minimally. Companies in
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VANECK ETFs
MANAGEMENT DISCUSSION (unaudited) (continued)
the United States contributed by far the most to performance, while those in Belgium, Sweden and Taiwan detracted the most.
Morningstar International Moat
Launched over six years ago as a means to capture moat-based opportunities abroad, VanEck Morningstar International Moat ETF (MOTI®) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® Global ex-US Moat Focus IndexSM (MGEUMFUN). The index is intended to track the overall performance of wide and narrow moat rated companies in developed and emerging markets outside the U.S. with sustainable competitive advantages at attractive prices according to Morningstar’s equity research team. The index contains at least 50 stocks that are reviewed each quarter.
For the 12 month period under review, the Fund returned +16.64%. The three sectors providing the greatest contributions to performance were: financial, communication services and energy. Only two sectors, consumer discretionary and utilities detracted from performance. While companies in Switzerland contributed the most to performance, those in the U.S. detracted the most.
Morningstar Wide Moat
VanEck Morningstar Wide Moat ETF (MOAT®), now with a nine year track record, seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® Wide Moat Focus IndexSM (MWMFTR). The index targets U.S. companies with sustainable competitive advantages, i.e., “moats,” and attractive valuations in the view of Morningstar’s team of more than 100 equity analysts.3
According to the forward-looking process of Morningstar’s Equity Research group, companies with moats have the potential to create above-average returns for longer periods of time. The index’s approach to investing in U.S. companies with wide economic moats when they are attractively priced has resulted in long-term outperformance versus the broad U.S. equity market.4
The Fund returned +36.11% for the 12 month period under review. The primary drivers of performance were the Fund’s exposure to the financial, information technology and industrial sectors. Only one sector detracted from performance, utilities, and then only minimally.
Social Sentiment
Launched in March 2021 as a means of providing exposure to U.S. large cap stocks with the highest degree of positive social sentiment and bullish investor perception, based on content aggregated from online sources including social media, news articles, blog posts and other alternative datasets, VanEck Social Sentiment ETF (BUZZ) seeks to track, as closely as possible, before fees and expenses, the price and yield performance of the BUZZ NextGen AI US Sentiment Leaders Index (BUZZTR).
Over the period from inception to September 30, 2021, the Fund returned -1.38%. While the information technology sector contributed by far the most positively to performance, followed by the health care and communication services sectors, their aggregate contribution (together with those of the three other positively-contributing sectors) were outweighed by the negative contributions from the industrial, consumer discretionary, materials and energy sectors.
1 Global Industry Classification Standard (GICS®) is a widely accepted equity securities classification system developed by Morgan Stanley Capital International (MSCI) and Standard & Poor’s.
2 Allocations to equities (long) represented by the S&P 500® Index. The S&P 500 Index consists of 500 widely held U.S. common stocks covering the industrial, utility, financial and transportation sectors. Allocations to cash (flat) represented by the Solactive 13-week U.S. T-bill Index. The Solactive 13-week U.S. T-bill Index is a rules-based index mirroring the performance of the current U.S. 13-week T-bill.
3 Equity analysts referred to are part of Morningstar’s Equity Research group which consists of various wholly-owned subsidiaries of Morningstar, Inc., including but not limited to, Morningstar Research Services LLC.
4 Based on the Morningstar Wide Moat Focus Index versus the Morningstar US Market Index from the period 2/14/2007–9/30/2021.
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VANECK INFLATION ALLOCATION ETF
September 30, 2021 (unaudited)
Average Annual Total Return | |||
Share Price | NAV | BCOMTR1 | |
One Year | 34.00% | 34.11% | 42.29% |
Life* | 2.90% | 2.91% | 5.19% |
* | Commencement of Fund: 4/9/18; First Day of Secondary Market Trading: 4/10/18. | |
1 | The Bloomberg Commodity Index (BCOMTR) is the Fund’s broad-based benchmark index. BCOMTR is calculated on an excess return basis and reflects commodity futures price movements. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | NDRCMGLF1 | SPTR2 | |
One Year | 29.15% | 29.29% | 30.00% | 30.00% |
Life* | 13.89% | 13.84% | 14.54% | 16.30% |
* | Commencement of Fund: 10/4/17; First Day of Secondary Market Trading: 10/5/17. | |
1 | The Ned Davis Research CMG US Large Cap Long/Flat Index (the “NDR CMG Index”) (NDRCMGLF) is a rules-based index that follows a proprietary model developed by Ned Davis Research, Inc. in conjunction with CMG Capital Management Group, Inc. To help limit potential loss associated with adverse market conditions, the model produces trade signals to dictate the NDR CMG Index’s equity allocation ranging from 100% fully invested (i.e., “long”) to 100% in cash (i.e., “flat”). When the NDR CMG Index is long, or 100% fully invested, it will be allocated to the S&P 500 Index. When the NDR CMG Index is flat, or 100% cash, it will be allocated to the Solactive 13-week U.S. T-bill Index. | |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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VANECK MORNINGSTAR DURABLE DIVIDEND ETF
PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MSUSDVTU1 | SPTR2 | |
One Year | 17.81% | 17.89% | 18.22% | 30.00% |
Life* | 10.04% | 9.99% | 10.28% | 19.78% |
* | Commencement of Fund: 10/30/18; First Day of Secondary Market Trading: 10/31/18. | |
1 | The Morningstar® US Dividend Valuation IndexSM (MSUSDVTU) is a rules-based index intended to offer exposure to companies that Morningstar determines have a high dividend yield, strong financial health and an attractive uncertainty-adjusted valuation. | |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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VANECK MORNINGSTAR GLOBAL WIDE MOAT ETF
PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MSGWMFNU1 | SPTR2 | |
One Year | 22.96% | 22.99% | 23.61% | 30.00% |
Life* | 17.81% | 17.69% | 18.00% | 19.78% |
* | Commencement of Fund: 10/30/18; First Day of Secondary Market Trading: 10/31/18. | |
1 | The Morningstar® Global Wide Moat Focus IndexSM (MSGWMFNU) is a rules-based index intended to offer exposure to companies that Morningstar determines have sustainable competitive advantages based on a proprietary methodology that considers quantitative and qualitative factors. | |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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VANECK MORNINGSTAR INTERNATIONAL MOAT ETF
PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MGEUMFUN1 | SPTR2 | |
One Year | 16.93% | 16.64% | 18.06% | 30.00% |
Five Year | 6.93% | 6.95% | 7.69% | 16.90% |
Life* | 4.64% | 4.63% | 5.36% | 14.45% |
* | Commencement of Fund: 7/13/15; First Day of Secondary Market Trading: 7/14/15. | |
1 | Morningstar® Global ex-US Moat Focus IndexSM (MGEUMFUN) is a rules-based index intended to offer exposure to companies that Morningstar determines have sustainable competitive advantages based on a proprietary methodology that considers quantitative and qualitative factors (“wide and narrow moat companies”). | |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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VANECK MORNINGSTAR WIDE MOAT ETF
PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MWMFTR1 | SPTR2 | |
One Year | 36.15% | 36.11% | 36.88% | 30.00% |
Five Year | 18.14% | 18.18% | 18.74% | 16.90% |
Life* | 16.07% | 16.08% | 16.65% | 15.18% |
* | Commencement of Fund: 4/24/12; First Day of Secondary Market Trading: 4/25/12. | |
1 | Morningstar® Wide Moat Focus IndexSM (MWMFTR) is a rules-based index intended to offer exposure to companies that Morningstar, Inc. determines have sustainable competitive advantages based on a proprietary methodology that considers quantitative and qualitative factors (“wide moat companies”). | |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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PERFORMANCE COMPARISON
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | BUZZTR1 | SPTR2 | |
Life* | (1.36)% | (1.38)% | (1.12)% | 12.22% |
* | Commencement of Fund: 3/2/21; First Day of Secondary Market Trading: 3/3/21. | |
1 | The BUZZ NextGen AI US Sentiment Leaders Index (BUZZTR) is designed to track the performance of a subset of U.S. companies which are selected by analyzing data from online sources to identify those companies which rank highest in terms of bullish perception and breadth of discussion. | |
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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VANECK ETF TRUST
(unaudited)
The price used to calculate market return (Share Price) is determined by using the closing price listed on its primary listing exchange. Since the shares of each Fund did not trade in the secondary market until after each Fund’s commencement, for the period from commencement to the first day of secondary market trading in shares of each Fund, the NAV of each Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for each Fund reflects temporary waivers of expenses and/or fees. Had each Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.
Investment return and value of the shares of each Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Fund returns reflect reinvestment of dividends and capital gains distributions. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.
Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Certain indices may take into account withholding taxes. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.
The Morningstar® Global ex-US Moat Focus IndexSM, Morningstar® Global Wide Moat Focus IndexSM, Morningstar® US Dividend Valuation IndexSM and Morningstar® Wide Moat Focus IndexSM are published by Morningstar. The Morningstar name and logo are registered trademarks of Morningstar. Morningstar Global ex-US Moat Focus IndexSM, Morningstar Global Wide Moat Focus IndexSM, Morningstar® US Dividend Valuation IndexSM and Morningstar Wide Moat Focus IndexSM are service marks of Morningstar. The Ned Davis Research CMG US Large Cap Long/Flat Index is published by Ned Davis Research, Inc. (“NDR”). The BUZZ NextGen AI US Sentiment Leaders Index is published by BUZZ Holdings ULC.
Morningstar, NDR and BUZZ Holdings ULC are referred to herein as the “Index Providers”. The Index Providers do not sponsor, endorse, or promote the Funds and bear no liability with respect to the Funds or any security.
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VANECK ETF TRUST
(unaudited)
Hypothetical $1,000 investment at beginning of period
As a shareholder of a Fund, you incur operating expenses, including management fees and other Fund expenses. This disclosure is intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The disclosure is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, April 1, 2021 to September 30, 2021.
Actual Expenses
The first line in the table below provides information about account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning
Account Value April 1, 2021 |
Ending
Account Value September 30, 2021 |
Annualized
Expense Ratio During Period |
Expenses Paid
During the Period April 1, 2021 - September 30, 2021* |
|||||
Inflation Allocation ETF | ||||||||
Actual | $1,000.00 | $1,061.30 | 0.55% | $2.84 | ||||
Hypothetical** | $1,000.00 | $1,022.31 | 0.55% | $2.79 | ||||
Long/Flat Trend ETF | ||||||||
Actual | $1,000.00 | $1,086.80 | 0.55% | $2.88 | ||||
Hypothetical** | $1,000.00 | $1,022.31 | 0.55% | $2.79 | ||||
Morningstar Durable Dividend ETF | ||||||||
Actual | $1,000.00 | $1,027.70 | 0.29% | $1.47 | ||||
Hypothetical** | $1,000.00 | $1,023.61 | 0.29% | $1.47 | ||||
Morningstar Global Wide Moat ETF | ||||||||
Actual | $1,000.00 | $1,046.40 | 0.52% | $2.67 | ||||
Hypothetical** | $1,000.00 | $1,022.46 | 0.52% | $2.64 | ||||
Morningstar International Moat ETF | ||||||||
Actual | $1,000.00 | $942.10 | 0.57% | $2.78 | ||||
Hypothetical** | $1,000.00 | $1,022.21 | 0.57% | $2.89 | ||||
Morningstar Wide Moat ETF | ||||||||
Actual | $1,000.00 | $1,059.30 | 0.46% | $2.37 | ||||
Hypothetical** | $1,000.00 | $1,022.76 | 0.46% | $2.33 |
13 |
|
VANECK ETF TRUST
EXPLANATION OF EXPENSES
(unaudited) (continued)
Beginning
Account Value April 1, 2021 |
Ending
Account Value September 30, 2021 |
Annualized
Expense Ratio During Period |
Expenses Paid
During the Period April 1, 2021 - September 30, 2021* |
|||||
Social Sentiment ETF | ||||||||
Actual | $1,000.00 | $1,021.30 | 0.75% | $3.80 | ||||
Hypothetical** | $1,000.00 | $1,021.31 | 0.75% | $3.80 |
* | Expenses are equal to the Fund’s annualized expense ratio (for the six months ended September 30, 2021), multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year divided by the number of the days in the fiscal year (to reflect the one-half year period). |
** | Assumes annual return of 5% before expenses |
14 |
|
VANECK INFLATION ALLOCATION ETF
CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
EXCHANGE TRADED FUNDS: 99.8% (a) | ||||||||
Energy Select Sector SPDR Fund † | 13,294 | $ | 692,484 | |||||
First Trust NASDAQ Clean Edge Green Energy Index Fund | 3,126 | 195,688 | ||||||
Global X US Infrastructure Development ETF | 36,140 | 918,317 | ||||||
Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF † | 171,308 | 3,606,034 | ||||||
Invesco Solar ETF | 2,437 | 194,838 | ||||||
iShares Global Infrastructure ETF | 20,431 | 937,783 | ||||||
iShares Gold Strategy ETF | 14,865 | 798,845 | ||||||
iShares Gold Trust | 6,254 | 208,946 | ||||||
iShares MSCI Global Metals & Mining Producers ETF † | 10,824 | 441,403 | ||||||
Nuveen Short-Term REIT ETF | 5,790 | 204,329 | ||||||
Purpose Bitcoin ETF | 48,131 | 395,637 | ||||||
SPDR Gold MiniShares Trust | 11,986 | 209,276 | ||||||
VanEck Agribusiness ETF ‡ | 8,599 | 784,573 | ||||||
VanEck Energy Income ETF ‡ | 18,068 | 980,050 | ||||||
VanEck Gold Miners ETF † ‡ | 23,328 | 687,476 | ||||||
VanEck Low Carbon Energy ETF † ‡ | 2,676 | 398,697 | ||||||
VanEck Merk Gold Shares | 35,943 | 614,266 | ||||||
VanEck Mortgage REIT Income ETF ‡ | 9,938 | 189,021 | ||||||
VanEck Oil Services ETF ‡ | 2,438 | 480,310 | ||||||
VanEck Steel ETF ‡ | 8,842 | 488,167 | ||||||
VanEck Vectors Unconventional Oil & Gas ETF ‡ | 4,688 | 667,902 | ||||||
Vanguard Real Estate ETF † | 23,876 | 2,430,099 | ||||||
Total Exchange Traded Funds
(Cost: $15,461,586) |
16,524,141 |
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 0.1% | ||||||||
(Cost: $17,691) | ||||||||
Money Market Fund: 0.1% | ||||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 17,691 | 17,691 | ||||||
Total Investments: 99.9% | ||||||||
(Cost: $15,479,277) | 16,541,832 | |||||||
Other assets less liabilities: 0.1% | 13,612 | |||||||
NET ASSETS: 100.0% | $ | 16,555,444 |
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. |
† | Security fully or partially on loan. Total market value of securities on loan is $3,377,660. |
‡ | Affiliated issuer – as defined under the Investment Company Act of 1940. |
See Notes to Financial Statements
15 |
|
VANECK INFLATION ALLOCATION ETF
CONSOLIDATED SCHEDULE OF INVESTMENTS
(continued)
Summary of Investments by Sector | % of | |||||||
Excluding Collateral for Securities Loaned | Investments | Value | ||||||
Agribusiness | 4.7 | % | $ | 784,573 | ||||
Digital Currency | 2.4 | 395,637 | ||||||
Diversified Commodities Futures | 21.8 | 3,606,034 | ||||||
Energy | 14.9 | 2,461,757 | ||||||
Global Metals and Mining | 2.7 | 441,403 | ||||||
Gold Bullion | 11.1 | 1,831,333 | ||||||
Gold Mining | 4.2 | 687,476 | ||||||
Industrials | 5.6 | 918,317 | ||||||
Oil Services | 2.9 | 480,310 | ||||||
Real Estate Investment Trusts | 17.1 | 2,823,449 | ||||||
Steel | 2.9 | 488,167 | ||||||
Unconventional Oil & Gas | 4.0 | 667,902 | ||||||
Utilities | 5.7 | 937,783 | ||||||
100.0 | % | $ | 16,524,141 |
Transactions in securities of affiliates for the period ended September 30, 2021:
Value
9/30/2020 |
Purchases |
Sales
Proceeds |
Realized Gain
(Loss) |
Dividend
Income |
Net Change in
Unrealized Appreciation (Depreciation) |
Value
9/30/2021 |
||||||||||||||||||||||
VanEck Agribusiness ETF | $ | 659,441 | $ | 1,420,329 | $ | (1,448,848 | ) | $ | 142,467 | $ | 10,276 | $ | 11,184 | $ | 784,573 | |||||||||||||
VanEck Energy Income ETF | 404,867 | 1,229,347 | (872,681 | ) | 98,759 | (a) | 4,310 | 154,638 | (b) | 980,050 | ||||||||||||||||||
VanEck Gold Miners ETF | 473,870 | 1,161,596 | (754,738 | ) | (42,071 | ) | 3,812 | (151,181 | ) | 687,476 | ||||||||||||||||||
VanEck Low Carbon Energy ETF | 437,983 | 1,515,634 | (1,515,848 | ) | 76,468 | 431 | (115,540 | ) | 398,697 | |||||||||||||||||||
VanEck Mortgage REIT Income ETF | – | 210,303 | (14,760 | ) | (126 | ) | 1,176 | (5,501 | )(c) | 189,021 | ||||||||||||||||||
VanEck Oil Services ETF | 244,277 | 726,252 | (690,780 | ) | 116,192 | 5,579 | 84,369 | 480,310 | ||||||||||||||||||||
VanEck Steel ETF | 341,239 | 832,355 | (829,734 | ) | 125,857 | 10,835 | 18,450 | 488,167 | ||||||||||||||||||||
VanEck Vectors Coal ETF | 349,211 | – | (391,053 | ) | 60,691 | – | (18,849 | ) | – | |||||||||||||||||||
VanEck Vectors Unconventional Oil & Gas ETF | 265,145 | 778,133 | (717,536 | ) | 132,856 | 6,883 | 209,304 | 667,902 | ||||||||||||||||||||
$ | 3,176,033 | $ | 7,873,949 | $ | (7,235,978 | ) | $ | 711,093 | $ | 43,302 | $ | 186,874 | $ | 4,676,196 |
(a) | Includes Return of Capital distribution reclassification of $7,955. |
(b) | Includes Return of Capital distribution reclassification of $26,925. |
(c) | Includes Return of Capital distribution reclassification of $895. |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Exchange Traded Funds | $ | 16,524,141 | $ | — | $ | — | $ | 16,524,141 | ||||||||
Money Market Fund | 17,691 | — | — | 17,691 | ||||||||||||
Total Investments | $ | 16,541,832 | $ | — | $ | — | $ | 16,541,832 |
See Notes to Financial Statements
16 |
|
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
EXCHANGE TRADED FUND: 99.8% (a) | ||||||||
(Cost: $32,328,428) | ||||||||
Vanguard S&P 500 ETF † | 103,655 | $ | 40,881,532 | |||||
Total Investments: 99.8%
(Cost: $32,328,428) |
40,881,532 | |||||||
Other assets less liabilities: 0.2% | 77,934 | |||||||
NET ASSETS: 100.0% | $ | 40,959,466 |
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 $6,769,482. |
Summary of Investments by Sector |
% of
Investments |
Value | ||||||
Exchanged Traded Fund | 100.0 | % | $ | 40,881,532 |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||
Exchange Traded Funds | $ | 40,881,532 | $ | — | $ | — | $ | 40,881,532 |
See Notes to Financial Statements
17 |
|
VANECK MORNINGSTAR DURABLE DIVIDEND ETF
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 99.4% | ||||||||
Automobiles & Components: 0.1% | ||||||||
Gentex Corp. | 1,201 | $ | 39,609 | |||||
Banks: 5.1% | ||||||||
JPMorgan Chase & Co. | 15,923 | 2,606,436 | ||||||
Capital Goods: 7.7% | ||||||||
3M Co. | 5,832 | 1,023,050 | ||||||
Emerson Electric Co. | 3,755 | 353,721 | ||||||
General Dynamics Corp. | 1,646 | 322,665 | ||||||
Honeywell International, Inc. | 3,679 | 780,978 | ||||||
Hubbell, Inc. | 344 | 62,151 | ||||||
L3Harris Technologies, Inc. | 1,067 | 234,996 | ||||||
Lincoln Electric Holdings, Inc. | 284 | 36,576 | ||||||
Lockheed Martin Corp. | 2,319 | 800,287 | ||||||
MSC Industrial Direct Co., Inc. | 552 | 44,265 | ||||||
Northrop Grumman Corp. | 802 | 288,840 | ||||||
3,947,529 | ||||||||
Consumer Services: 4.0% | ||||||||
McDonald’s Corp. | 5,162 | 1,244,610 | ||||||
Starbucks Corp. | 5,749 | 634,172 | ||||||
Yum! Brands, Inc. | 1,441 | 176,249 | ||||||
2,055,031 | ||||||||
Diversified Financials: 3.0% | ||||||||
BlackRock, Inc. | 765 | 641,575 | ||||||
CME Group, Inc. | 2,084 | 403,004 | ||||||
Cohen & Steers, Inc. | 150 | 12,565 | ||||||
Evercore, Inc. | 246 | 32,883 | ||||||
Federated Hermes, Inc. | 1,023 | 33,248 | ||||||
Franklin Resources, Inc. | 3,092 | 91,894 | ||||||
Janus Henderson Group Plc | 1,913 | 79,064 | ||||||
T Rowe Price Group, Inc. | 1,327 | 261,021 | ||||||
1,555,254 | ||||||||
Energy: 1.3% | ||||||||
The Williams Companies, Inc. | 25,468 | 660,640 | ||||||
Food & Staples Retailing: 1.8% | ||||||||
Walmart, Inc. | 6,539 | 911,406 | ||||||
Food, Beverage & Tobacco: 16.5% | ||||||||
Altria Group, Inc. | 40,094 | 1,825,079 | ||||||
Hormel Foods Corp. | 2,047 | 83,927 | ||||||
Keurig Dr Pepper, Inc. | 3,369 | 115,085 | ||||||
Mondelez International, Inc. | 9,318 | 542,121 | ||||||
PepsiCo, Inc. | 11,705 | 1,760,549 | ||||||
Philip Morris International, Inc. | 23,116 | 2,191,166 | ||||||
The Coca-Cola Co. | 36,603 | 1,920,559 | ||||||
8,438,486 | ||||||||
Health Care Equipment & Services: 1.8% | ||||||||
Medtronic Plc | 7,577 | 949,777 | ||||||
Household & Personal Products: 0.9% | ||||||||
Colgate-Palmolive Co. | 6,193 | 468,067 | ||||||
Insurance: 1.9% | ||||||||
Allstate Corp. | 2,149 | 273,589 | ||||||
Chubb Ltd. | 2,483 | 430,751 | ||||||
Travelers Cos, Inc. | 1,743 | 264,953 | ||||||
969,293 | ||||||||
Materials: 1.2% | ||||||||
Air Products and Chemicals, Inc. | 1,506 | 385,702 |
Number
of Shares |
Value | |||||||
Materials (continued) | ||||||||
International Flavors & Fragrances, Inc. | 1,624 | $ | 217,161 | |||||
Valvoline, Inc. | 932 | 29,060 | ||||||
631,923 | ||||||||
Media & Entertainment: 2.6% | ||||||||
Comcast Corp. | 23,416 | 1,309,657 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences: 20.3% | ||||||||
AbbVie, Inc. | 22,222 | 2,397,087 | ||||||
Amgen, Inc. | 5,733 | 1,219,123 | ||||||
Bristol-Myers Squibb Co. | 21,154 | 1,251,682 | ||||||
Gilead Sciences, Inc. | 15,541 | 1,085,539 | ||||||
Johnson & Johnson | 14,682 | 2,371,143 | ||||||
Merck & Co., Inc. | 27,593 | 2,072,510 | ||||||
10,397,084 | ||||||||
Semiconductors & Semiconductor Equipment: 5.0% | ||||||||
Analog Devices, Inc. | 2,830 | 473,968 | ||||||
Qualcomm, Inc. | 6,658 | 858,749 | ||||||
Texas Instruments, Inc. | 6,402 | 1,230,529 | ||||||
2,563,246 | ||||||||
Software & Services: 0.2% | ||||||||
Western Union Co. | 5,616 | 113,555 | ||||||
Technology Hardware & Equipment: 4.0% | ||||||||
Cisco Systems, Inc. | 33,541 | 1,825,637 | ||||||
Corning, Inc. | 5,984 | 218,356 | ||||||
2,043,993 | ||||||||
Telecommunication Services: 10.0% | ||||||||
AT&T, Inc. | 96,794 | 2,614,406 | ||||||
Cogent Communications Holdings, Inc. | 557 | 39,458 | ||||||
Verizon Communications, Inc. | 45,615 | 2,463,666 | ||||||
5,117,530 | ||||||||
Transportation: 0.6% | ||||||||
Norfolk Southern Corp. | 1,286 | 307,675 | ||||||
Utilities: 11.4% | ||||||||
Alliant Energy Corp. | 2,081 | 116,494 | ||||||
Ameren Corp. | 1,957 | 158,517 | ||||||
American Electric Power Co., Inc. | 5,219 | 423,678 | ||||||
Atmos Energy Corp. | 1,070 | 94,374 | ||||||
Avangrid, Inc. (USD) | 728 | 35,381 | ||||||
Consolidated Edison, Inc. | 4,417 | 320,630 | ||||||
Dominion Energy, Inc. | 9,405 | 686,753 | ||||||
DTE Energy Co. | 2,186 | 244,198 | ||||||
Duke Energy Corp. | 9,084 | 886,508 | ||||||
NextEra Energy, Inc. | 10,930 | 858,224 | ||||||
NiSource, Inc. | 4,356 | 105,546 | ||||||
OGE Energy Corp. | 2,893 | 95,353 | ||||||
PPL Corp. | 13,444 | 374,819 | ||||||
Sempra Energy | 3,230 | 408,595 | ||||||
Southern Co. | 13,116 | 812,798 |
See Notes to Financial Statements
18 |
|
Number
of Shares |
Value | |||||||
Utilities (continued) | ||||||||
WEC Energy Group, Inc. | 2,793 | $ | 246,343 | |||||
5,868,211 | ||||||||
Total Common Stocks | ||||||||
(Cost: $49,336,162) | 50,954,402 | |||||||
Total Investments: 99.4% | ||||||||
(Cost: $49,336,162) | 50,954,402 | |||||||
Other assets less liabilities: 0.6% | 282,770 | |||||||
NET ASSETS: 100.0% | $ | 51,237,172 |
Definitions:
USD | United States Dollar |
Summary of Investments by Sector |
% of
Investments |
Value | ||||||
Communication Services | 12.6 | % | $ | 6,427,187 | ||||
Consumer Discretionary | 4.1 | 2,094,640 | ||||||
Consumer Staples | 19.3 | 9,817,959 | ||||||
Energy | 1.3 | 660,640 | ||||||
Financials | 10.1 | 5,130,983 | ||||||
Health Care | 22.3 | 11,346,861 | ||||||
Industrials | 8.4 | 4,255,204 | ||||||
Information Technology | 9.2 | 4,720,794 | ||||||
Materials | 1.2 | 631,923 | ||||||
Utilities | 11.5 | 5,868,211 | ||||||
100.0 | % | $ | 50,954,402 |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks * | $ | 50,954,402 | $ | — | $ | — | $ | 50,954,402 |
* | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
19 |
|
VANECK MORNINGSTAR GLOBAL WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 99.9% | ||||||||
Argentina: 1.2% | ||||||||
MercadoLibre, Inc. (USD) * | 134 | $ | 225,040 | |||||
Australia: 3.8% | ||||||||
Australia & New Zealand Banking Group Ltd. # | 8,892 | 178,426 | ||||||
National Australia Bank Ltd. # | 9,510 | 187,391 | ||||||
Westpac Banking Corp. # | 19,988 | 369,341 | ||||||
735,158 | ||||||||
Belgium: 0.8% | ||||||||
Anheuser-Busch InBev SA/NV # | 2,585 | 146,690 | ||||||
Canada: 4.0% | ||||||||
Royal Bank of Canada | 3,888 | 386,790 | ||||||
Toronto-Dominion Bank | 5,870 | 388,522 | ||||||
775,312 | ||||||||
China: 2.6% | ||||||||
Tencent Holdings Ltd. (HKD) # | 2,400 | 143,277 | ||||||
Yum China Holdings, Inc. (USD) | 6,212 | 360,979 | ||||||
504,256 | ||||||||
Denmark: 1.2% | ||||||||
Novo Nordisk A/S # | 2,351 | 226,749 | ||||||
France: 4.0% | ||||||||
Airbus SE # * | 2,937 | 389,577 | ||||||
Safran SA # | 2,986 | 377,867 | ||||||
767,444 | ||||||||
Germany: 1.2% | ||||||||
GEA Group AG # * | 4,830 | 220,697 | ||||||
Japan: 3.8% | ||||||||
Hoshizaki Corp. # | 2,000 | 181,451 | ||||||
Japan Tobacco, Inc. # | 10,100 | 197,406 | ||||||
Nabtesco Corp. # | 9,100 | 343,206 | ||||||
722,063 | ||||||||
Sweden: 0.8% | ||||||||
Elekta AB # † | 14,464 | 162,091 | ||||||
Switzerland: 4.0% | ||||||||
Julius Baer Group Ltd. # | 5,959 | 395,532 | ||||||
Novartis AG # | 2,279 | 186,696 | ||||||
Roche Holding AG # | 516 | 188,143 | ||||||
770,371 | ||||||||
Taiwan: 1.9% | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. # | 18,000 | 372,278 | ||||||
United Kingdom: 8.5% | ||||||||
AstraZeneca Plc # | 1,756 | 211,778 | ||||||
BAE Systems Plc # | 26,089 | 197,739 | ||||||
British American Tobacco Plc # | 5,361 | 187,523 | ||||||
GlaxoSmithKilne Plc # | 10,047 | 189,753 | ||||||
Imperial Brands Plc # | 18,222 | 381,412 | ||||||
Meggitt Plc # * | 28,898 | 285,309 | ||||||
Unilever Plc # | 3,209 | 173,852 | ||||||
1,627,366 | ||||||||
United States: 62.1% | ||||||||
3M Co. | 989 | 173,490 | ||||||
Alphabet, Inc. * | 150 | 401,028 | ||||||
Altria Group, Inc. | 3,941 | 179,394 | ||||||
Amazon.com, Inc. * | 55 | 180,677 |
Number
of Shares |
Value | |||||||
United States (continued) | ||||||||
Applied Materials, Inc. | 1,501 | $ | 193,224 | |||||
Aspen Technology, Inc. * | 1,387 | 170,324 | ||||||
Bank of New York Mellon Corp. | 3,785 | 196,214 | ||||||
Berkshire Hathaway, Inc. * | 1,417 | 386,756 | ||||||
Biogen, Inc. * | 624 | 176,586 | ||||||
Blackbaud, Inc. * | 5,447 | 383,196 | ||||||
BlackRock, Inc. | 217 | 181,989 | ||||||
Boeing Co. * | 949 | 208,723 | ||||||
Bristol-Myers Squibb Co. | 5,986 | 354,192 | ||||||
Cheniere Energy, Inc. * | 2,229 | 217,706 | ||||||
Comcast Corp. | 3,390 | 189,603 | ||||||
Compass Minerals International, Inc. | 6,327 | 407,459 | ||||||
Constellation Brands, Inc. | 1,760 | 370,814 | ||||||
Corteva, Inc. | 9,052 | 380,908 | ||||||
Emerson Electric Co. | 4,035 | 380,097 | ||||||
Equifax, Inc. | 728 | 184,490 | ||||||
Facebook, Inc. * | 1,120 | 380,117 | ||||||
General Dynamics Corp. | 981 | 192,305 | ||||||
Gilead Sciences, Inc. | 2,790 | 194,881 | ||||||
Intel Corp. | 3,743 | 199,427 | ||||||
Intercontinental Exchange, Inc. | 1,686 | 193,586 | ||||||
Lam Research Corp. | 344 | 195,788 | ||||||
Masco Corp. | 3,361 | 186,704 | ||||||
McDonald’s Corp. | 1,667 | 401,930 | ||||||
Medtronic Plc | 3,033 | 380,187 | ||||||
Microchip Technology, Inc. | 1,300 | 199,537 | ||||||
Microsoft Corp. | 1,407 | 396,661 | ||||||
Pfizer, Inc. | 4,312 | 185,459 | ||||||
Philip Morris International, Inc. | 3,906 | 370,250 | ||||||
Polaris, Inc. | 3,219 | 385,186 | ||||||
Roper Technologies, Inc. | 837 | 373,411 | ||||||
Salesforce.com, Inc. * | 798 | 216,434 | ||||||
ServiceNow, Inc. * | 670 | 416,921 | ||||||
The Coca-Cola Co. | 3,519 | 184,642 | ||||||
Thermo Fisher Scientific, Inc. | 395 | 225,675 | ||||||
Tyler Technologies, Inc. * | 415 | 190,340 | ||||||
Veeva Systems, Inc. * | 1,283 | 369,722 | ||||||
Wells Fargo & Co. | 9,221 | 427,947 | ||||||
Western Union Co. | 8,263 | 167,078 | ||||||
Zimmer Biomet Holdings, Inc. | 1,203 | 176,071 | ||||||
11,927,129 | ||||||||
Total Common Stocks
(Cost: $16,262,612) |
19,182,644 | |||||||
Total Investments: 99.9%
(Cost: $16,262,612) |
19,182,644 | |||||||
Other assets less liabilities: 0.1% | 27,356 | |||||||
NET ASSETS: 100.0% | $ | 19,210,000 |
See Notes to Financial Statements
20 |
|
Definitions:
HKD | Hong Kong Dollar |
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 $5,894,184 which represents 30.7% of net assets. |
† | Security fully or partially on loan. Total market value of securities on loan is $153,978. |
Summary of Investments by Sector |
% of
Investments |
Value | ||||||
Communication Services | 5.8 | % | $ | 1,114,024 | ||||
Consumer Discretionary | 8.1 | 1,553,813 | ||||||
Consumer Staples | 11.4 | 2,191,983 | ||||||
Energy | 1.1 | 217,706 | ||||||
Financials | 17.2 | 3,292,495 | ||||||
Health Care | 16.9 | 3,227,983 | ||||||
Industrials | 19.3 | 3,695,066 | ||||||
Information Technology | 16.1 | 3,101,207 | ||||||
Materials | 4.1 | 788,367 | ||||||
100.0 | % | $ | 19,182,644 |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks | ||||||||||||||||
Argentina | $ | 225,040 | $ | — | $ | — | $ | 225,040 | ||||||||
Australia | — | 735,158 | — | 735,158 | ||||||||||||
Belgium | — | 146,690 | — | 146,690 | ||||||||||||
Canada | 775,312 | — | — | 775,312 | ||||||||||||
China | 360,979 | 143,277 | — | 504,256 | ||||||||||||
Denmark | — | 226,749 | — | 226,749 | ||||||||||||
France | — | 767,444 | — | 767,444 | ||||||||||||
Germany | — | 220,697 | — | 220,697 | ||||||||||||
Japan | — | 722,063 | — | 722,063 | ||||||||||||
Sweden | — | 162,091 | — | 162,091 | ||||||||||||
Switzerland | — | 770,371 | — | 770,371 | ||||||||||||
Taiwan | — | 372,278 | — | 372,278 | ||||||||||||
United Kingdom | — | 1,627,366 | — | 1,627,366 | ||||||||||||
United States | 11,927,129 | — | — | 11,927,129 | ||||||||||||
Total Investments | $ | 13,288,460 | $ | 5,894,184 | $ | — | $ | 19,182,644 |
See Notes to Financial Statements
21 |
|
VANECK MORNINGSTAR INTERNATIONAL MOAT ETF
SCHEDULE OF INVESMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 100.1% | ||||||||
Australia: 3.9% | ||||||||
Link Administration Holdings Ltd. # | 412,407 | $ | 1,292,175 | |||||
Telstra Corp. Ltd. # | 280,784 | 786,132 | ||||||
Westpac Banking Corp. # | 37,396 | 691,009 | ||||||
2,769,316 | ||||||||
Belgium: 2.8% | ||||||||
Anheuser-Busch InBev SA/NV # | 22,265 | 1,263,467 | ||||||
Proximus SADP # | 35,551 | 705,856 | ||||||
1,969,323 | ||||||||
China: 13.3% | ||||||||
Agricultural Bank of China Ltd. # | 1,516,000 | 689,548 | ||||||
ANTA Sports Products Ltd. (HKD) # | 33,000 | 623,155 | ||||||
Bank of China Ltd. (HKD) # | 2,076,000 | 733,524 | ||||||
BOC Hong Kong Holdings Ltd. (HKD) # | 448,500 | 1,351,518 | ||||||
China Education Group Holdings Ltd. (HKD) # † | 333,000 | 574,398 | ||||||
China Gas Holdings Ltd. (HKD) # | 245,200 | 724,184 | ||||||
China Resources Pharmaceutical Group Ltd. (HKD) 144A # | 1,227,500 | 602,476 | ||||||
Innovent Biologics, Inc. (HKD) 144A # * | 86,500 | 833,016 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. (HKD) # | 344,200 | 667,127 | ||||||
Sinopharm Group Co. Ltd. (HKD) # | 265,600 | 696,021 | ||||||
Tencent Holdings Ltd. (HKD) # | 9,500 | 567,138 | ||||||
Yum China Holdings, Inc. (USD) | 11,572 | 672,449 | ||||||
Yutong Bus Co. Ltd. # | 378,120 | 663,467 | ||||||
9,398,021 | ||||||||
Denmark: 2.0% | ||||||||
Danske Bank A/S # | 85,197 | 1,436,111 | ||||||
France: 9.2% | ||||||||
Accor SA # * | 21,139 | 754,149 | ||||||
Dassault Aviation SA # | 12,800 | 1,439,582 | ||||||
Safran SA # | 5,936 | 751,178 | ||||||
Sanofi # | 14,523 | 1,398,766 | ||||||
Sodexo SA # * | 8,512 | 744,297 | ||||||
Thales SA # | 14,694 | 1,425,402 | ||||||
6,513,374 | ||||||||
Germany: 5.8% | ||||||||
Bayerische Motoren Werke AG # | 14,827 | 1,408,982 | ||||||
Continental AG # * | 10,816 | 1,174,778 | ||||||
Fresenius SE & Co. KGaA # | 28,216 | 1,351,263 | ||||||
Vitesco Technologies Group AG * | 2,067 | 122,197 | ||||||
4,057,220 | ||||||||
Hong Kong: 1.8% | ||||||||
Sun Hung Kai Properties Ltd. # | 99,500 | 1,242,391 | ||||||
Italy: 2.9% | ||||||||
Leonardo SpA # * | 179,386 | 1,467,806 |
Number
of Shares |
Value | |||||||
Italy (continued) | ||||||||
Telecom Italia SpA # | 1,451,531 | $ | 567,858 | |||||
2,035,664 | ||||||||
Japan: 3.3% | ||||||||
Japan Tobacco, Inc. # | 36,000 | 703,623 | ||||||
KDDI Corp. # | 23,800 | 781,604 | ||||||
Murata Manufacturing Co. Ltd. # | 9,800 | 864,658 | ||||||
2,349,885 | ||||||||
Luxembourg: 3.9% | ||||||||
Millicom International Cellular SA (SDR) # * | 38,180 | 1,383,686 | ||||||
Samsonite International SA (HKD) 144A # * | 653,100 | 1,402,533 | ||||||
2,786,219 | ||||||||
Mexico: 1.3% | ||||||||
America Movil SAB de CV | 999,000 | 887,914 | ||||||
Netherlands: 6.9% | ||||||||
ABN AMRO Bank NV 144A # * † | 112,737 | 1,627,341 | ||||||
ING Groep NV # † | 110,462 | 1,606,784 | ||||||
Koninklijke KPN NV # | 238,878 | 752,081 | ||||||
Royal Dutch Shell Plc (GBP) # | 38,723 | 861,775 | ||||||
4,847,981 | ||||||||
Singapore: 5.2% | ||||||||
CapitaLand Integrated Commercial Trust # | 1,007,308 | 1,500,161 | ||||||
CapitaLand Investment Ltd. * | 280,000 | 701,237 | ||||||
Singapore Technologies Engineering Ltd. # | 514,700 | 1,436,968 | ||||||
3,638,366 | ||||||||
South Korea: 3.1% | ||||||||
KT Corp. # | 25,461 | 696,341 | ||||||
SK Telecom Co. Ltd. # | 5,374 | 1,459,666 | ||||||
2,156,007 | ||||||||
Spain: 3.1% | ||||||||
Banco Santander SA # * | 394,788 | 1,430,806 | ||||||
Telefonica SA # * | 159,611 | 749,375 | ||||||
2,180,181 | ||||||||
Sweden: 3.4% | ||||||||
Svenska Handelsbanken AB # | 69,365 | 777,366 | ||||||
Swedbank AB # | 79,891 | 1,612,053 | ||||||
2,389,419 | ||||||||
Switzerland: 4.2% | ||||||||
Credit Suisse Group AG # | 74,800 | 738,032 | ||||||
Dufry AG # * | 14,120 | 792,444 | ||||||
Roche Holding AG # | 1,833 | 668,344 | ||||||
Zurich Insurance Group AG # | 1,847 | 754,547 | ||||||
2,953,367 | ||||||||
Taiwan: 4.8% | ||||||||
MediaTek, Inc. # | 22,000 | 708,124 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. # | 67,000 | 1,385,700 | ||||||
Win Semiconductors Corp. # | 120,000 | 1,319,493 | ||||||
3,413,317 | ||||||||
United Kingdom: 18.3% | ||||||||
British American Tobacco Plc # | 19,051 | 666,388 | ||||||
BT Group Plc # * | 314,687 | 675,105 | ||||||
GlaxoSmithKilne Plc # | 35,703 | 674,304 |
See Notes to Financial Statements
22 |
|
Number
of Shares |
Value | |||||||
United Kingdom (continued) | ||||||||
Hang Seng Bank Ltd. (HKD) # | 39,800 | $ | 681,726 | |||||
HSBC Holdings Plc # | 264,152 | 1,382,140 | ||||||
Imperial Brands Plc # | 67,968 | 1,422,665 | ||||||
Lloyds Banking Group Plc # | 2,423,005 | 1,509,192 | ||||||
Meggitt Plc # * | 113,222 | 1,117,836 | ||||||
Smiths Group Plc # | 35,556 | 686,102 | ||||||
Swire Properties Ltd. (HKD) # | 517,200 | 1,292,079 | ||||||
Vodafone Group Plc # | 855,041 | 1,302,026 | ||||||
WPP Plc # | 109,531 | 1,468,483 | ||||||
12,878,046 |
Number
of Shares |
Value | |||||||
United States: 0.9% | ||||||||
MGM China Holdings Ltd. (HKD) # * † | 448,800 | $ | 279,400 | |||||
Sands China Ltd. (HKD) # * | 167,200 | 342,175 | ||||||
621,575 | ||||||||
Total Common Stocks
(Cost: $70,163,510) |
70,523,697 | |||||||
Total Investments: 100.1%
(Cost: $70,163,510) |
70,523,697 | |||||||
Liabilities in excess of other assets: (0.1)% | (86,868) | |||||||
NET ASSETS: 100.0% | $ | 70,436,829 |
Definitions: | |
GBP | British Pound |
HKD | Hong Kong Dollar |
SDR | Swedish Depositary Receipt |
USD | United States Dollar |
Footnotes: | |
# | Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $68,139,900 which represents 96.7% of net assets. |
† | Security fully or partially on loan. Total market value of securities on loan is $3,438,469. |
* | Non-income producing |
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 $4,465,366, or 6.3% of net assets. |
Summary of Investments by Sector |
% of
Investments |
Value | ||||||
Communication Services | 18.1 | % | $ | 12,783,264 | ||||
Consumer Discretionary | 12.6 | 8,890,956 | ||||||
Consumer Staples | 5.8 | 4,056,143 | ||||||
Energy | 1.2 | 861,775 | ||||||
Financials | 24.2 | 17,021,697 | ||||||
Health Care | 9.9 | 6,891,319 | ||||||
Industrials | 12.7 | 8,988,340 | ||||||
Information Technology | 7.8 | 5,570,151 | ||||||
Real Estate | 6.7 | 4,735,868 | ||||||
Utilities | 1.0 | 724,184 | ||||||
100.0 | % | $ | 70,523,697 |
See Notes to Financial Statements
23 |
|
VANECK MORNINGSTAR INTERNATIONAL MOAT ETF
SCHEDULE OF INVESMENTS
(continued)
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks | ||||||||||||||||
Australia | $ | — | $ | 2,769,316 | $ | — | $ | 2,769,316 | ||||||||
Belgium | — | 1,969,323 | — | 1,969,323 | ||||||||||||
China | 672,449 | 8,725,572 | — | 9,398,021 | ||||||||||||
Denmark | — | 1,436,111 | — | 1,436,111 | ||||||||||||
France | — | 6,513,374 | — | 6,513,374 | ||||||||||||
Germany | 122,197 | 3,935,023 | — | 4,057,220 | ||||||||||||
Hong Kong | — | 1,242,391 | — | 1,242,391 | ||||||||||||
Italy | — | 2,035,664 | — | 2,035,664 | ||||||||||||
Japan | — | 2,349,885 | — | 2,349,885 | ||||||||||||
Luxembourg | — | 2,786,219 | — | 2,786,219 | ||||||||||||
Mexico | 887,914 | — | — | 887,914 | ||||||||||||
Netherlands | — | 4,847,981 | — | 4,847,981 | ||||||||||||
Singapore | 701,237 | 2,937,129 | — | 3,638,366 | ||||||||||||
South Korea | — | 2,156,007 | — | 2,156,007 | ||||||||||||
Spain | — | 2,180,181 | — | 2,180,181 | ||||||||||||
Sweden | — | 2,389,419 | — | 2,389,419 | ||||||||||||
Switzerland | — | 2,953,367 | — | 2,953,367 | ||||||||||||
Taiwan | — | 3,413,317 | — | 3,413,317 | ||||||||||||
United Kingdom | — | 12,878,046 | — | 12,878,046 | ||||||||||||
United States | — | 621,575 | — | 621,575 | ||||||||||||
Total Investments | $ | 2,383,797 | $ | 68,139,900 | $ | — | $ | 70,523,697 |
See Notes to Financial Statements
24 |
|
VANECK MORNINGSTAR WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 99.9% | ||||||||
Banks: 2.8% | ||||||||
Wells Fargo & Co. | 3,936,166 | $ | 182,677,464 | |||||
Capital Goods: 11.1% | ||||||||
Boeing Co. * | 754,533 | 165,951,988 | ||||||
Emerson Electric Co. | 830,345 | 78,218,499 | ||||||
General Dynamics Corp. | 437,749 | 85,811,936 | ||||||
Lockheed Martin Corp. | 458,065 | 158,078,232 | ||||||
Masco Corp. | 1,434,884 | 79,707,806 | ||||||
Raytheon Technologies Corp. | 1,033,051 | 88,801,064 | ||||||
Roper Technologies, Inc. | 177,448 | 79,164,876 | ||||||
735,734,401 | ||||||||
Commercial & Professional Services: 1.2% | ||||||||
Equifax, Inc. | 310,666 | 78,728,978 | ||||||
Consumer Durables & Apparel: 2.5% | ||||||||
Polaris, Inc. | 1,374,108 | 164,425,763 | ||||||
Consumer Services: 1.3% | ||||||||
McDonald’s Corp. | 352,848 | 85,075,181 | ||||||
Diversified Financials: 3.7% | ||||||||
Berkshire Hathaway, Inc. * | 604,695 | 165,045,453 | ||||||
Intercontinental Exchange, Inc. | 719,858 | 82,654,096 | ||||||
247,699,549 | ||||||||
Energy: 2.8% | ||||||||
Cheniere Energy, Inc. * | 1,933,132 | 188,809,002 | ||||||
Food, Beverage & Tobacco: 12.2% | ||||||||
Altria Group, Inc. | 3,446,983 | 156,906,666 | ||||||
Campbell Soup Co. | 1,989,983 | 83,201,189 | ||||||
Constellation Brands, Inc. | 751,423 | 158,317,312 | ||||||
Kellogg Co. | 2,618,279 | 167,360,394 | ||||||
Philip Morris International, Inc. | 1,667,253 | 158,038,912 | ||||||
The Coca-Cola Co. | 1,502,080 | 78,814,137 | ||||||
802,638,610 | ||||||||
Health Care Equipment & Services: 7.2% | ||||||||
Cerner Corp. | 1,040,412 | 73,369,854 | ||||||
Medtronic Plc | 1,294,635 | 162,282,497 | ||||||
Veeva Systems, Inc. * | 278,632 | 80,293,383 | ||||||
Zimmer Biomet Holdings, Inc. | 1,093,871 | 160,098,960 | ||||||
476,044,694 | ||||||||
Materials: 5.1% | ||||||||
Compass Minerals | ||||||||
International, Inc. ‡ | 2,700,902 | 173,938,089 | ||||||
Corteva, Inc. | 3,864,260 | 162,608,061 | ||||||
336,546,150 | ||||||||
Media & Entertainment: 6.3% | ||||||||
Alphabet, Inc. * | 64,009 | 171,129,342 | ||||||
Comcast Corp. | 1,447,231 | 80,943,630 | ||||||
Facebook, Inc. * | 478,073 | 162,253,195 | ||||||
414,326,167 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences: 12.3% | ||||||||
Biogen, Inc. * | 480,693 | 136,031,312 | ||||||
Bristol-Myers Squibb Co. | 2,555,261 | 151,194,793 | ||||||
Gilead Sciences, Inc. | 2,408,068 | 168,203,550 | ||||||
Merck & Co., Inc. | 2,213,253 | 166,237,433 | ||||||
Pfizer, Inc. | 2,119,999 | 91,181,157 | ||||||
Thermo Fisher Scientific, Inc. | 168,651 | 96,355,376 | ||||||
809,203,621 |
Number
of Shares |
Value | |||||||
Retailing: 2.4% | ||||||||
Amazon.com, Inc. * | 47,644 | $ | 156,512,446 | |||||
Semiconductors & Semiconductor | ||||||||
Equipment: 6.3% | ||||||||
Intel Corp. | 3,070,627 | 163,603,007 | ||||||
KLA Corp. | 254,218 | 85,038,463 | ||||||
Lam Research Corp. | 146,711 | 83,500,566 | ||||||
Microchip Technology, Inc. | 554,854 | 85,164,540 | ||||||
417,306,576 | ||||||||
Software & Services: 19.0% | ||||||||
Aspen Technology, Inc. * | 1,255,760 | 154,207,328 | ||||||
Blackbaud, Inc. * | 2,325,163 | 163,575,217 | ||||||
Guidewire Software, Inc. * | 1,419,882 | 168,781,373 | ||||||
Microsoft Corp. | 600,653 | 169,336,094 | ||||||
Salesforce.com, Inc. * | 666,458 | 180,756,739 | ||||||
ServiceNow, Inc. * | 155,069 | 96,494,787 | ||||||
Tyler Technologies, Inc. * | 363,628 | 166,777,982 | ||||||
Western Union Co. | 7,514,577 | 151,944,747 | ||||||
1,251,874,267 | ||||||||
Transportation: 1.3% | ||||||||
CH Robinson Worldwide, Inc. | 960,714 | 83,582,118 | ||||||
Utilities: 2.4% | ||||||||
Dominion Energy, Inc. | 2,175,280 | 158,838,946 | ||||||
Total Common Stocks | ||||||||
(Cost: $6,077,878,429) | 6,590,023,933 | |||||||
Total Investments: 99.9% | ||||||||
(Cost: $6,077,878,429) | 6,590,023,933 | |||||||
Other assets less liabilities: 0.1% | 9,193,451 | |||||||
NET ASSETS: 100.0% | $ | 6,599,217,384 |
See Notes to Financial Statements
25 |
|
VANECK MORNINGSTAR WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
(continued)
Footnotes:
* | Non-income producing |
‡ | Affiliated issuer – as defined under the Investment Company Act of 1940. |
Summary of Investments by Sector |
% of
Investments |
Value | ||||||
Communication Services | 6.3 | % | $ | 414,326,167 | ||||
Consumer Discretionary | 6.2 | 406,013,390 | ||||||
Consumer Staples | 12.2 | 802,638,610 | ||||||
Energy | 2.9 | 188,809,002 | ||||||
Financials | 6.5 | 430,377,013 | ||||||
Health Care | 19.5 | 1,285,248,315 | ||||||
Industrials | 13.6 | 898,045,497 | ||||||
Information Technology | 25.3 | 1,669,180,843 | ||||||
Materials | 5.1 | 336,546,150 | ||||||
Utilities | 2.4 | 158,838,946 | ||||||
100.0% | $ | 6,590,023,933 |
Transactions in securities of affiliates for the period ended September 30, 2021:
Value
9/30/2020 |
Purchases |
Sales
Proceeds |
Realized Gain
(Loss) |
Dividend
Income |
Net Change in
Unrealized Appreciation (Depreciation) |
Value
9/30/2021 |
||||||||||||||||||||||
Compass Minerals International, Inc. | $ | –(a) | $ | 123,593,866 | $ | (49,569,744) | $ | (1,727,277) | $ | 5,676,150 | $ | 5,480,356 | $ | 173,938,089 |
(a) | Security held by the Fund, however not classified as an affiliate at the beginning of the reporting period. |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks * | $ | 6,590,023,933 | $ | — | $ | — | $ | 6,590,023,933 |
* | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
26 |
|
SCHEDULE OF INVESTMENTS
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 100.0% | ||||||||
Automobiles & Components: 6.1% | ||||||||
Ford Motor Co. * | 212,874 | $ | 3,014,296 | |||||
General Motors Co. * | 29,890 | 1,575,502 | ||||||
QuantumScape Corp. * † | 41,618 | 1,021,306 | ||||||
Tesla, Inc. * | 8,175 | 6,339,550 | ||||||
11,950,654 | ||||||||
Banks: 3.2% | ||||||||
Bank of America Corp. | 27,013 | 1,146,702 | ||||||
Citigroup, Inc. | 14,155 | 993,398 | ||||||
Rocket Cos, Inc. | 149,334 | 2,395,317 | ||||||
Wells Fargo & Co. | 35,861 | 1,664,309 | ||||||
6,199,726 | ||||||||
Capital Goods: 9.5% | ||||||||
Boeing Co. * | 18,133 | 3,988,172 | ||||||
General Electric Co. | 8,739 | 900,379 | ||||||
Lockheed Martin Corp. | 7,750 | 2,674,525 | ||||||
Plug Power, Inc. * † | 244,252 | 6,238,196 | ||||||
Virgin Galactic Holdings, Inc. * | 172,558 | 4,365,717 | ||||||
18,166,989 | ||||||||
Consumer Durables & Apparel: 2.1% | ||||||||
Lululemon Athletica, Inc. * | 2,787 | 1,127,899 | ||||||
Peloton Interactive, Inc. * | 33,181 | 2,888,406 | ||||||
4,016,305 | ||||||||
Consumer Services: 5.4% | ||||||||
Airbnb, Inc. * | 12,904 | 2,164,646 | ||||||
Carnival Corp. * | 66,195 | 1,655,537 | ||||||
DraftKings, Inc. * † | 82,134 | 3,955,573 | ||||||
Penn National Gaming, Inc. * | 24,730 | 1,791,936 | ||||||
Starbucks Corp. | 6,408 | 706,866 | ||||||
10,274,558 | ||||||||
Diversified Financials: 0.4% | ||||||||
Goldman Sachs Group, Inc. | 2,191 | 828,264 | ||||||
Energy: 0.8% | ||||||||
Exxon Mobil Corp. | 25,169 | 1,480,441 | ||||||
Food & Staples Retailing: 1.0% | ||||||||
Walmart, Inc. | 13,335 | 1,858,632 | ||||||
Food, Beverage & Tobacco: 0.4% | ||||||||
Beyond Meat, Inc. * † | 6,854 | 721,452 | ||||||
Materials: 2.5% | ||||||||
Barrick Gold Corp. (USD) | 104,476 | 1,885,792 | ||||||
Cleveland-Cliffs, Inc. * † | 84,597 | 1,675,867 | ||||||
United States Steel Corp. | 49,072 | 1,078,112 | ||||||
4,639,771 | ||||||||
Media & Entertainment: 16.0% | ||||||||
Activision Blizzard, Inc. | 10,153 | 785,741 | ||||||
Alphabet, Inc. * | 741 | 1,981,078 | ||||||
AMC Entertainment Holdings, Inc. * | 127,159 | 4,839,672 | ||||||
Facebook, Inc. * | 9,311 | 3,160,060 | ||||||
Netflix, Inc. * | 5,602 | 3,419,125 |
Number
of Shares |
Value | |||||||
Media & Entertainment (continued) | ||||||||
Pinterest, Inc. * | 33,674 | $ | 1,715,690 | |||||
Roku, Inc. * | 13,644 | 4,275,347 | ||||||
Snap, Inc. * | 23,053 | 1,702,925 | ||||||
Spotify Technology SA (USD) * | 3,378 | 761,199 | ||||||
Twitter, Inc. * | 37,126 | 2,242,039 | ||||||
ViacomCBS, Inc. | 48,511 | 1,916,670 | ||||||
Walt Disney Co. * | 23,811 | 4,028,107 | ||||||
30,827,653 | ||||||||
Pharmaceuticals, Biotechnology & Life | ||||||||
Sciences: 10.3% | ||||||||
AbbVie, Inc. | 10,112 | 1,090,781 | ||||||
Agilent Technologies, Inc. | 13,812 | 2,175,804 | ||||||
Johnson & Johnson | 5,048 | 815,252 | ||||||
Moderna, Inc. * | 13,536 | 5,209,465 | ||||||
Novavax, Inc. * | 23,725 | 4,918,430 | ||||||
Pfizer, Inc. | 134,037 | 5,764,931 | ||||||
19,974,663 | ||||||||
Real Estate: 0.8% | ||||||||
Opendoor Technologies, Inc. * † | 78,643 | 1,614,541 | ||||||
Retailing: 9.4% | ||||||||
Amazon.com, Inc. * | 1,766 | 5,801,381 | ||||||
Chewy, Inc. * † | 19,698 | 1,341,631 | ||||||
GameStop Corp. * | 30,975 | 5,435,183 | ||||||
Macy’s, Inc. | 94,457 | 2,134,728 | ||||||
Target Corp. | 10,702 | 2,448,297 | ||||||
The Home Depot, Inc. | 3,059 | 1,004,147 | ||||||
18,165,367 | ||||||||
Semiconductors & Semiconductor | ||||||||
Equipment: 7.6% | ||||||||
Advanced Micro Devices, Inc. * | 58,119 | 5,980,445 | ||||||
Intel Corp. | 22,115 | 1,178,287 | ||||||
Micron Technology, Inc. | 23,903 | 1,696,635 | ||||||
NVIDIA Corp. | 27,819 | 5,762,984 | ||||||
14,618,351 | ||||||||
Software & Services: 19.6% | ||||||||
BlackBerry Ltd. (USD) * | 574,997 | 5,594,721 | ||||||
C3.ai, Inc. * † | 42,763 | 1,981,637 | ||||||
Crowdstrike Holdings, Inc. * | 8,459 | 2,079,053 | ||||||
Digital Turbine, Inc. * | 43,661 | 3,001,694 | ||||||
DocuSign, Inc. * | 4,864 | 1,252,140 | ||||||
Microsoft Corp. | 12,410 | 3,498,627 | ||||||
Palantir Technologies, Inc. * | 236,120 | 5,676,324 | ||||||
PayPal Holdings, Inc. * | 7,582 | 1,972,912 | ||||||
Salesforce.com, Inc. * | 6,859 | 1,860,298 | ||||||
Shopify, Inc. (USD) * | 693 | 939,556 | ||||||
Snowflake, Inc. * | 6,494 | 1,963,980 | ||||||
Square, Inc. * | 7,997 | 1,918,000 | ||||||
Unity Software, Inc. * | 13,101 | 1,654,001 | ||||||
Visa, Inc. | 6,385 | 1,422,259 |
See Notes to Financial Statements
27 |
|
VANECK SOCIAL SENTIMENT ETF
SCHEDULE OF INVESTMENTS
(continued)
Number
of Shares |
Value | |||||||
Software & Services (continued) | ||||||||
Zoom Video Communications, Inc. * | 12,241 | $ | 3,201,022 | |||||
38,016,224 | ||||||||
Technology Hardware & Equipment: 2.9% | ||||||||
Apple, Inc. | 40,044 | 5,666,226 | ||||||
Telecommunication Services: 0.8% | ||||||||
AT&T, Inc. | 56,234 | 1,518,880 |
Number
of Shares |
Value | |||||||
Transportation: 1.2% | ||||||||
American Airlines Group, Inc. * | 51,507 | $ | 1,056,924 | |||||
Uber Technologies, Inc. * | 31,555 | 1,413,664 | ||||||
2,470,588 | ||||||||
Total Common Stocks
(Cost: $191,853,624) |
193,009,285 | |||||||
Total Investments: 100.0%
(Cost: $191,853,624) |
193,009,285 | |||||||
Liabilities in excess of other assets: 0.0% | (75,074) | |||||||
NET ASSETS: 100.0% | $ | 192,934,211 |
Definitions: | |
USD | United States Dollar |
Footnotes: | |
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $17,589,466. |
Summary of Investments by Sector |
% of
Investments |
Value | ||||||
Communication Services | 16.8 | % | $ | 32,346,532 | ||||
Consumer Discretionary | 23.0 | 44,406,883 | ||||||
Consumer Staples | 1.4 | 2,580,084 | ||||||
Energy | 0.8 | 1,480,441 | ||||||
Financials | 3.6 | 7,027,990 | ||||||
Health Care | 10.3 | 19,974,664 | ||||||
Industrials | 10.7 | 20,637,578 | ||||||
Information Technology | 30.2 | 58,300,802 | ||||||
Materials | 2.4 | 4,639,770 | ||||||
Real Estate | 0.8 | 1,614,541 | ||||||
100.0 | % | $ | 193,009,285 |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||||
Common Stocks * | $ | 193,009,285 | $ | — | $ | — | $ | 193,009,285 |
* | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
28 |
|
VANECK ETF TRUST
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 2021
Inflation
Allocation ETF (a) |
Long/Flat Trend
ETF |
Morningstar
Durable Dividend ETF |
Morningstar
Global Wide Moat ETF |
|||||||||||||
Assets: | ||||||||||||||||
Investments, at value (1) | ||||||||||||||||
Unaffiliated issuers (2) | $ | 11,847,945 | $ | 40,881,532 | $ | 50,954,402 | $ | 19,182,644 | ||||||||
Affiliated issuers (3) | 4,676,196 | — | — | — | ||||||||||||
Short-term investments held as collateral for securities loaned (4) | 17,691 | — | — | — | ||||||||||||
Cash | 81,213 | 20,999 | 218,812 | 65,220 | ||||||||||||
Cash denominated in foreign currency, at value (5) | — | — | — | 2,435 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | — | — | — | 2,418 | ||||||||||||
Shares of beneficial interest sold | 636,747 | — | — | — | ||||||||||||
Due from Adviser | 2,262 | — | — | — | ||||||||||||
Dividends and interest | 360 | 142,535 | 130,629 | 25,269 | ||||||||||||
Prepaid expenses | 1,048 | 1,058 | — | 1,052 | ||||||||||||
Total assets | 17,263,462 | 41,046,124 | 51,303,843 | 19,279,038 | ||||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 635,020 | — | — | 2,424 | ||||||||||||
Collateral for securities loaned | 17,691 | — | — | — | ||||||||||||
Due to Adviser | — | 26,216 | 11,890 | 7,778 | ||||||||||||
Deferred Trustee fees | 430 | 1,140 | 624 | 212 | ||||||||||||
Accrued expenses | 54,877 | 59,302 | 54,157 | 58,624 | ||||||||||||
Total liabilities | 708,018 | 86,658 | 66,671 | 69,038 | ||||||||||||
NET ASSETS | $ | 16,555,444 | $ | 40,959,466 | $ | 51,237,172 | $ | 19,210,000 | ||||||||
Shares outstanding | 650,000 | 1,025,000 | 1,675,000 | 500,000 | ||||||||||||
Net asset value, redemption and offering price per share | $ | 25.47 | $ | 39.96 | $ | 30.59 | $ | 38.42 | ||||||||
Net Assets consist of: | ||||||||||||||||
Aggregate paid in capital | $ | 25,822,891 | $ | 35,198,129 | $ | 53,601,809 | $ | 15,294,841 | ||||||||
Total distributable earnings (loss) | (9,267,447) | 5,761,337 | (2,364,637) | 3,915,159 | ||||||||||||
NET ASSETS | $ | 16,555,444 | $ | 40,959,466 | $ | 51,237,172 | $ | 19,210,000 | ||||||||
(1) Value of securities on loan | $ | 3,377,660 | $ | 6,769,482 | $ | — | $ | 153,978 | ||||||||
(2) Cost of investments - Unaffiliated issuers | $ | 10,997,164 | $ | 32,328,428 | $ | 49,336,162 | $ | 16,262,612 | ||||||||
(3) Cost of investments - Affiliated issuers | $ | 4,464,422 | $ | — | $ | — | $ | — | ||||||||
(4) Cost of short-term investments held as collateral for securities loaned | $ | 17,691 | $ | — | $ | — | $ | — | ||||||||
(5) Cost of cash denominated in foreign currency | $ | — | $ | — | $ | — | $ | 2,424 |
(a) | Consolidated Statement of Assets and Liabilities |
See Notes to Financial Statements
29 |
|
VANECK ETF TRUST
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 2021
Morningstar
International Moat ETF |
Morningstar Wide
Moat ETF |
Social Sentiment
ETF |
||||||||||
Assets: | ||||||||||||
Investments, at value (1) | ||||||||||||
Unaffiliated issuers (2) | $ | 70,523,697 | $ | 6,416,085,844 | $ | 193,009,285 | ||||||
Affiliated issuers (3) | — | 173,938,089 | — | |||||||||
Cash | 8,425 | 2,325,019 | 34,803 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 872,514 | — | 1,844,710 | |||||||||
Shares of beneficial interest sold | — | 3,709,826 | — | |||||||||
Dividends and interest | 196,162 | 9,708,266 | 18,589 | |||||||||
Prepaid expenses | 2,100 | 20,970 | — | |||||||||
Total assets | 71,602,898 | 6,605,788,014 | 194,907,387 | |||||||||
Liabilities: | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 78,981 | 3,709,437 | — | |||||||||
Shares of beneficial interest redeemed | — | — | 1,842,896 | |||||||||
Line of credit | 453,234 | — | — | |||||||||
Due to Adviser | 24,345 | 2,508,452 | 130,280 | |||||||||
Due to custodian | 533,098 | — | — | |||||||||
Deferred Trustee fees | 2,055 | 128,457 | — | |||||||||
Accrued expenses | 74,356 | 224,284 | — | |||||||||
Total liabilities | 1,166,069 | 6,570,630 | 1,973,176 | |||||||||
NET ASSETS | $ | 70,436,829 | $ | 6,599,217,384 | $ | 192,934,211 | ||||||
Shares outstanding | 2,100,000 | 90,050,000 | 7,825,000 | |||||||||
Net asset value, redemption and offering price per share | $ | 33.54 | $ | 73.28 | $ | 24.66 | ||||||
Net Assets consist of: | ||||||||||||
Aggregate paid in capital | $ | 75,791,854 | $ | 6,396,435,130 | $ | 221,793,175 | ||||||
Total distributable earnings (loss) | (5,355,025) | 202,782,254 | (28,858,964) | |||||||||
NET ASSETS | $ | 70,436,829 | $ | 6,599,217,384 | $ | 192,934,211 | ||||||
(1) Value of securities on loan | $ | 3,438,469 | $ | — | $ | 17,589,466 | ||||||
(2) Cost of investments - Unaffiliated issuers | $ | 70,163,510 | $ | 5,919,881,233 | $ | 191,853,624 | ||||||
(3) Cost of investments - Affiliated issuers | $ | — | $ | 157,997,196 | $ | — |
See Notes to Financial Statements
30 |
|
VANECK ETF TRUST
For the Year Ended September 30, 2021
Inflation
Allocation ETF (a) |
Long/Flat Trend
ETF |
Morningstar
Durable Dividend ETF |
Morningstar
Global Wide Moat ETF |
|||||||||||||
Income: | ||||||||||||||||
Dividends - unaffiliated issuers | $ | 61,889 | $ | 474,209 | $ | 1,634,573 | $ | 319,744 | ||||||||
Dividends - affiliated issuers | 43,302 | — | — | — | ||||||||||||
Interest | 66 | 53 | — | 54 | ||||||||||||
Securities lending income | 19,544 | 314 | 1,354 | 846 | ||||||||||||
Foreign taxes withheld | — | — | — | (11,532) | ||||||||||||
Total income | 124,801 | 474,576 | 1,635,927 | 309,112 | ||||||||||||
Expenses: | ||||||||||||||||
Management fees | 54,195 | 162,038 | 129,126 | 70,997 | ||||||||||||
Professional fees | 68,314 | 54,615 | 51,682 | 53,203 | ||||||||||||
Custody and accounting fees | 28,057 | 25,927 | 31,599 | 45,602 | ||||||||||||
Reports to shareholders | 8,382 | 8,121 | 9,611 | 7,431 | ||||||||||||
IOPV fees | 1,043 | 1,110 | 1,045 | 1,045 | ||||||||||||
Trustees’ fees and expenses | 346 | 769 | 704 | 241 | ||||||||||||
Registration fees | 8,122 | 6,082 | 5,655 | 4,253 | ||||||||||||
Insurance | 1,800 | 2,003 | 2,873 | 1,689 | ||||||||||||
Interest | 959 | 161 | 1,444 | 46 | ||||||||||||
Other | 3,079 | 4,215 | 3,345 | 4,333 | ||||||||||||
Total expenses | 174,297 | 265,041 | 237,084 | 188,840 | ||||||||||||
Waiver of management fees | (54,195) | (86,726) | (106,447) | (70,997) | ||||||||||||
Expenses assumed by the Adviser | (59,111) | — | — | (35,707) | ||||||||||||
Net expenses | 60,991 | 178,315 | 130,637 | 82,136 | ||||||||||||
Net investment income | 63,810 | 296,261 | 1,505,290 | 226,976 | ||||||||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments - unaffiliated issuers | 410,893 | 54,124 | (500,103) | 832,212 | ||||||||||||
Investments - affiliated issuers | (24,557) | — | — | — | ||||||||||||
In-kind redemptions - unaffiliated issuers | 1,033,816 | 1,913,600 | 4,195,283 | — | ||||||||||||
In-kind redemptions - affiliated issuers | 735,650 | — | — | — | ||||||||||||
Foreign currency transactions and foreign denominated assets and liabilities | — | — | — | 3 | ||||||||||||
Net realized gain | 2,155,802 | 1,967,724 | 3,695,180 | 832,215 | ||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments - unaffiliated issuers | 111,493 | 5,441,917 | 1,294,475 | 1,569,722 | ||||||||||||
Investments – affiliated issuers | 186,874 | — | — | — | ||||||||||||
Foreign currency transactions and foreign denominated assets and liabilities | — | — | — | (31) | ||||||||||||
Net change in unrealized appreciation (depreciation) | 298,367 | 5,441,917 | 1,294,475 | 1,569,691 | ||||||||||||
Net Increase in Net Assets Resulting from Operations | $ | 2,517,979 | $ | 7,705,902 | $ | 6,494,945 | $ | 2,628,882 |
(a) | Consolidated Statement of Operations |
See Notes to Financial Statements
31 |
|
VANECK ETF TRUST
STATEMENTS OF OPERATIONS
For the Year Ended September 30, 2021
Morningstar
International Moat ETF |
Morningstar Wide
Moat ETF |
Social Sentiment
ETF (a) |
||||||||||
Income: | ||||||||||||
Dividends - unaffiliated issuers | $ | 2,488,149 | $ | 90,744,979 | $ | 824,796 | ||||||
Dividends - affiliated issuers | — | 5,676,150 | — | |||||||||
Interest | 0 | 2,528 | — | |||||||||
Securities lending income | 23,303 | 2,346 | 30,896 | |||||||||
Foreign taxes withheld | (130,839) | — | (2,965) | |||||||||
Total income | 2,380,613 | 96,426,003 | 852,727 | |||||||||
Expenses: | ||||||||||||
Management fees | 324,991 | 23,313,143 | 1,166,411 | |||||||||
Professional fees | 60,567 | 79,967 | — | |||||||||
Custody and accounting fees | 78,396 | 15,727 | — | |||||||||
Reports to shareholders | 8,217 | 272,025 | — | |||||||||
IOPV fees | 1,255 | 1,255 | — | |||||||||
Trustees’ fees and expenses | 1,289 | 86,374 | — | |||||||||
Registration fees | 4,011 | 74,971 | — | |||||||||
Insurance | 3,711 | 44,824 | — | |||||||||
Interest | 5,069 | 50,606 | 1,124 | |||||||||
Other | 5,427 | 71,642 | — | |||||||||
Total expenses | 492,933 | 24,010,534 | 1,167,535 | |||||||||
Waiver of management fees | (123,821) | — | — | |||||||||
Net expenses | 369,112 | 24,010,534 | 1,167,535 | |||||||||
Net investment income (loss) | 2,011,501 | 72,415,469 | (314,808) | |||||||||
Net realized gain (loss) on: | ||||||||||||
Investments | 3,563,449 | (30,048,357) | (32,222,984) | |||||||||
In-kind redemptions - unaffiliated issuers | — | 819,750,653 | 38,789,347 | |||||||||
In-kind redemptions - affiliated issuers | — | (1,727,277) | — | |||||||||
Foreign currency transactions and foreign denominated assets and liabilities | 4,508 | — | — | |||||||||
Net realized gain | 3,567,957 | 787,975,019 | 6,566,363 | |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments - unaffiliated issuers | 2,290,293 | 418,999,329 | 1,155,660 | |||||||||
Investments – affiliated issuers | — | 5,480,356 | — | |||||||||
Foreign currency transactions and foreign denominated assets and liabilities | (12,252) | — | — | |||||||||
Net change in unrealized appreciation (depreciation) | 2,278,041 | 424,479,685 | 1,155,660 | |||||||||
Net Increase in Net Assets Resulting from Operations | $ | 7,857,499 | $ | 1,284,870,173 | $ | 7,407,215 |
(a) | For the period March 3, 2021 (commencement of operations) through September 30, 2021. |
See Notes to Financial Statements
32 |
|
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
September 30, 2021
Inflation Allocation ETF (a) | Long/Flat Trend ETF | |||||||||||||||
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
|||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 63,810 | $ | 427,161 | $ | 296,261 | $ | 715,794 | ||||||||
Net realized gain (loss) | 2,155,802 | (7,397,492) | 1,967,724 | (675,324) | ||||||||||||
Net change in unrealized appreciation (depreciation) | 298,367 | 1,385 | 5,441,917 | (1,380,712) | ||||||||||||
Net increase (decrease) in net assets resulting from operations | 2,517,979 | (6,968,946) | 7,705,902 | (1,340,242) | ||||||||||||
Distributions to shareholders from: | ||||||||||||||||
Distributable earnings | (870,000) | (700,005) | (625,013) | (1,000,040) | ||||||||||||
Share transactions**: | ||||||||||||||||
Proceeds from sale of shares | 22,438,966 | 7,646,301 | 10,130,756 | 18,877,077 | ||||||||||||
Cost of shares redeemed | (16,597,432) | (21,216,119) | (7,800,977) | (50,838,556) | ||||||||||||
Increase (decrease) in net assets resulting from share transactions | 5,841,534 | (13,569,818) | 2,329,779 | (31,961,479) | ||||||||||||
Total increase (decrease) in net assets | 7,489,513 | (21,238,769) | 9,410,668 | (34,301,761) | ||||||||||||
Net Assets, beginning of year | 9,065,931 | 30,304,700 | 31,548,798 | 65,850,559 | ||||||||||||
Net Assets, end of year | $ | 16,555,444 | $ | 9,065,931 | $ | 40,959,466 | $ | 31,548,798 | ||||||||
**Shares of Common Stock Issued (no par value) | ||||||||||||||||
Shares sold | 925,000 | 300,000 | 250,000 | 650,000 | ||||||||||||
Shares redeemed | (725,000) | (1,050,000) | (225,000) | (2,000,000) | ||||||||||||
Net increase (decrease) | 200,000 | (750,000) | 25,000 | (1,350,000) |
(a) | Consolidated Statement of Changes in Net Assets |
See Notes to Financial Statements
33 |
|
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
September 30, 2021
Morningstar Durable Dividend ETF | Morningstar Global Wide Moat ETF | |||||||||||||||
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
|||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 1,505,290 | $ | 943,919 | $ | 226,976 | $ | 122,187 | ||||||||
Net realized gain (loss) | 3,695,180 | (1,506,494) | 832,215 | 207,702 | ||||||||||||
Net change in unrealized appreciation (depreciation) | 1,294,475 | 253,694 | 1,569,691 | 908,233 | ||||||||||||
Net increase (decrease) in net assets resulting from operations | 6,494,945 | (308,881) | 2,628,882 | 1,238,122 | ||||||||||||
Distributions to shareholders from: | ||||||||||||||||
Distributable earnings | (1,311,545) | (991,310) | (360,080) | (181,250) | ||||||||||||
Share transactions**: | ||||||||||||||||
Proceeds from sale of shares | 38,886,433 | 33,663,334 | 7,288,863 | 2,802,272 | ||||||||||||
Cost of shares redeemed | (25,634,055) | (17,916,809) | — | — | ||||||||||||
Increase in net assets resulting from share transactions | 13,252,378 | 15,746,525 | 7,288,863 | 2,802,272 | ||||||||||||
Total increase in net assets | 18,435,778 | 14,446,334 | 9,557,665 | 3,859,144 | ||||||||||||
Net Assets, beginning of year | 32,801,394 | 18,355,060 | 9,652,335 | 5,793,191 | ||||||||||||
Net Assets, end of year | $ | 51,237,172 | $ | 32,801,394 | $ | 19,210,000 | $ | 9,652,335 | ||||||||
**Shares of Common Stock Issued (no par value) | ||||||||||||||||
Shares sold | 1,300,000 | 1,250,000 | 200,000 | 100,000 | ||||||||||||
Shares redeemed | (850,000) | (675,000) | — | — | ||||||||||||
Net increase | 450,000 | 575,000 | 200,000 | 100,000 |
See Notes to Financial Statements
34 |
|
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
September 30, 2021
Morningstar International Moat ETF | Morningstar Wide Moat ETF | |||||||||||||||
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
Year Ended
September 30, 2021 |
Year Ended
September 30, 2020 |
|||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 2,011,501 | $ | 1,341,877 | $ | 72,415,469 | $ | 55,436,421 | ||||||||
Net realized gain (loss) | 3,567,957 | (5,136,388) | 787,975,019 | 250,211,385 | ||||||||||||
Net change in unrealized appreciation (depreciation) | 2,278,041 | 2,152,119 | 424,479,685 | (32,450,558) | ||||||||||||
Net increase (decrease) in net assets resulting from operations | 7,857,499 | (1,642,392) | 1,284,870,173 | 273,197,248 | ||||||||||||
Distributions to shareholders from: | ||||||||||||||||
Distributable earnings | (1,260,000) | (2,750,000) | (58,997,340) | (43,002,000) | ||||||||||||
Share transactions**: | ||||||||||||||||
Proceeds from sale of shares | 12,422,953 | 7,963,287 | 4,832,747,019 | 2,395,475,138 | ||||||||||||
Cost of shares redeemed | — | (34,704,740) | (2,857,369,614) | (1,714,078,307) | ||||||||||||
Increase (decrease) in net assets resulting from share transactions | 12,422,953 | (26,741,453) | 1,975,377,405 | 681,396,831 | ||||||||||||
Total increase (decrease) in net assets | 19,020,452 | (31,133,845) | 3,201,250,238 | 911,592,079 | ||||||||||||
Net Assets, beginning of year | 51,416,377 | 82,550,222 | 3,397,967,146 | 2,486,375,067 | ||||||||||||
Net Assets, end of year | $ | 70,436,829 | $ | 51,416,377 | $ | 6,599,217,384 | $ | 3,397,967,146 | ||||||||
**Shares of Common Stock Issued (no par value) | ||||||||||||||||
Shares sold | 350,000 | 250,000 | 68,550,000 | 45,150,000 | ||||||||||||
Shares redeemed | — | (1,200,000) | (40,700,000) | (32,550,000) | ||||||||||||
Net increase (decrease) | 350,000 | (950,000) | 27,850,000 | 12,600,000 |
See Notes to Financial Statements
35 |
|
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
September 30, 2021
Social Sentiment
ETF |
||||
Period Ended
September 30, 2021 (a) |
||||
Operations: | ||||
Net investment loss | $ | (314,808) | ||
Net realized gain | 6,566,363 | |||
Net change in unrealized appreciation (depreciation) | 1,155,660 | |||
Net increase in net assets resulting from operations | 7,407,215 | |||
Share transactions**: | ||||
Proceeds from sale of shares | 670,932,819 | |||
Cost of shares redeemed | (485,405,823) | |||
Increase in net assets resulting from share transactions | 185,526,996 | |||
Total increase in net assets | 192,934,211 | |||
Net Assets, beginning of period | — | |||
Net Assets, end of period | $ | 192,934,211 | ||
**Shares of Common Stock Issued (no par value) | ||||
Shares sold | 27,525,000 | |||
Shares redeemed | (19,700,000) | |||
Net increase | 7,825,000 |
(a) | For the period March 3, 2021 (commencement of operations) through September 30, 2021. |
See Notes to Financial Statements
36 |
|
VANECK ETF TRUST
For a share outstanding throughout each period:
(a) | Consolidated Financial Highlights |
(b) | For the period April 9, 2018 (commencement of operations) through September 30, 2018. |
(c) | Calculated based upon average shares outstanding |
(d) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(e) | Not Annualized |
(f) | The ratios presented do not reflect the Fund’s proportionate share of income and expenses from the Fund’s investment in underlying funds. |
(g) | Annualized |
(h) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
37 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | For the period October 4, 2017 (commencement of operations) through September 30, 2018. |
(b) | Calculated based upon average shares outstanding |
(c) | The amount shown does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchase of shares in relation to fluctuating market values of the investments of the Fund. |
(d) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(e) | Not Annualized |
(f) | The ratios presented do not reflect the Fund’s proportionate share of income and expenses from the Fund’s investment in underlying funds. |
(g) | Annualized |
(h) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
38 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | For the period October 30, 2018 (commencement of operations) through September 30, 2019. |
(b) | Calculated based upon average shares outstanding |
(c) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(d) | Not Annualized |
(e) | Annualized |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
39 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | For the period October 30, 2018 (commencement of operations) through September 30, 2019. |
(b) | Calculated based upon average shares outstanding |
(c) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(d) | Not Annualized |
(e) | Annualized |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
40 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
(a) | Calculated based upon average shares outstanding |
(b) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(c) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
41 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
(a) | Calculated based upon average shares outstanding |
(b) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(c) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
42 |
|
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | For the period March 3, 2021 (commencement of operations) through September 30, 2021. |
(b) | Calculated based upon average shares outstanding |
(c) | The amount shown does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchase of shares in relation to fluctuating market values of the investments of the Fund. |
(d) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(e) | Not Annualized |
(f) | Annualized |
(g) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
43 |
|
VANECK ETF TRUST
September 30, 2021
Note 1—Fund Organization—VanEck ETF Trust (the “Trust”), formerly known as VanEck Vectors ETF Trust, is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust was incorporated in Delaware as a statutory trust on March 15, 2001. The Trust operates as a series fund, and offers multiple investment portfolios, each of which represents a separate series of the Trust. These financial statements relate only to the investment portfolios listed in the diversification table below (each a “Fund” and, collectively, the “Funds”).
Fund | Diversification Classification | |
Inflation Allocation ETF * | Non-Diversified | |
Long/Flat Trend ETF | Diversified | |
Morningstar Durable Dividend ETF | Non-Diversified | |
Morningstar Global Wide Moat ETF | Non-Diversified | |
Morningstar International Moat ETF | Diversified | |
Morningstar Wide Moat ETF | Diversified | |
Social Sentiment ETF | Non-Diversified |
* | Formerly known as Real Asset Allocation ETF |
Each Fund, except for Inflation 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.
Using a proprietary, rules-based real asset allocation model, the Inflation Allocation ETF seeks to achieve its investment objective by investing primarily in exchange traded products (“ETPs”) that provide exposure to real assets, which include commodities, real estate, natural resources and infrastructure, as well as companies that own, operate, or derive a significant portion of their value from real assets or the production thereof.
Note 2—Significant Accounting Policies—The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
The Funds are investment companies and follow accounting and reporting requirements of Accounting Standards Codification (“ASC”) 946 Financial Services—Investment Companies.
The following summarizes the Funds’ significant accounting policies.
A. | Security Valuation—The Funds value their investments in securities and other assets and liabilities at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Securities traded on national exchanges are valued at the closing price on the markets in which the securities trade. Securities traded on the NASDAQ Stock Market LLC (“NASDAQ”) are valued at the NASDAQ official closing price. Over-the-counter securities not included on NASDAQ and listed securities for which no sale was reported are valued at the mean of the bid and ask prices. To the extent these securities are actively traded they are categorized as Level 1 in the fair value hierarchy (described below). Certain foreign securities, whose values may be affected by market direction or events occurring before the Funds’ pricing time (4:00 p.m. Eastern Time) but after the last close of the securities’ primary market, are fair valued using a pricing service and are categorized as Level 2 in the fair value hierarchy. The pricing service, using methods approved by the Board of Trustees, considers the correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant ADR’s and futures contracts. The Funds may also fair value securities in other situations, such as when a particular foreign market is closed but the Fund is open. Short-term debt securities with sixty days or less to maturity are valued at amortized cost, which with accrued interest approximates fair value. Money market fund investments are valued at net asset value and are considered as Level 1 in the fair value hierarchy. The Pricing Committee of Van Eck Associates Corporation (“VEAC”) and Van Eck Absolute Return Advisers Corporation (“VEARA”) (VEAC and |
44 |
|
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, 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 Inflation 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 |
45 |
|
VANECK ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
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 are not separately disclosed in the financial statements. Such amounts are included with the net realized and unrealized gains and losses on investment securities in the Statements of Operations. Recognized gains or losses attributable to foreign currency fluctuations on foreign currency denominated assets, other than investments, and liabilities are recorded as net realized gain (loss) and net change in unrealized appreciation (depreciation) on foreign currency transactions and foreign denominated assets and liabilities in the Statements of Operations. |
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 receive cash and or securities as collateral for securities lending. For financial reporting purposes, the Funds present securities lending assets and liabilities on a gross basis in the Statements of Assets and Liabilities. Cash collateral received for securities lending in the form of money market fund investments, if any, at September 30, 2021, is presented in the Schedules of Investments and in the Statements of Assets and Liabilities. Non-cash collateral is disclosed in Note 9 (Securities Lending). |
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 certain 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, Morningstar Wide Moat ETF and Social Sentiment ETF. VEARA is the investment
46 |
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adviser to the Inflation 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, 2022, to waive management fees and assume expenses to prevent each Fund’s total annual operating expenses (excluding acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses) from exceeding expense limitations listed in the following table.
The Social Sentiment ETF utilizes a unitary management fee structure where the Adviser is responsible for all expenses of the Fund, excluding the fee payment under the investment management agreement, acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses.
The management fee rate and expense limitations for the year ended September 30, 2021, are as follows:
Management | Expense | |||||||
Fund | Fees | Limitations | ||||||
Inflation Allocation ETF | 0.50 | % | 0.55 | % | ||||
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 | ||||||
Social Sentiment ETF | 0.75 | 0.75 |
Refer to the Statements of Operations for amounts waived/assumed by the Adviser.
The Adviser waives the management fees it charges the Funds by the amount it collects as a management fee from underlying funds managed by the Adviser. For the year ended September 30, 2021, the Adviser waived management fees of $16,117 due to such investments held in the Inflation Allocation ETF.
In addition, Van Eck Securities Corporation, an affiliate of the Adviser, acts as the Funds’ distributor (“the Distributor”). Certain officers and a Trustee of the Trust are officers, directors or stockholders of the Adviser and Distributor.
At September 30, 2021, the Adviser owned approximately 9% of Morningstar Durable Dividend ETF.
Note 4—Capital Share Transactions—As of September 30, 2021, there were an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Fund shares are not individually redeemable and are issued and redeemed at their net asset value per share only through certain authorized broker-dealers (“Authorized Participants”) in blocks of shares (“Creation Units”).
The consideration for the purchase or redemption of Creation Units of the Funds generally consists of the in-kind contribution or distribution of securities constituting the Funds’ underlying index (“Deposit Securities”) plus a balancing cash component to equate the transaction to the net asset value per share of the Fund on the transaction date. Cash may also be substituted in an amount equivalent to the value of certain Deposit Securities, generally as a result of market circumstances, or when the securities are not available in sufficient quantity for delivery, or are not eligible for trading by the Authorized Participant. The Funds may issue Creation Units in advance of receipt of Deposit Securities subject to various conditions, including, for the benefit of the Funds, a requirement to maintain cash collateral on deposit at the custodian equal to at least 115% of the daily marked to market value of the missing Deposit Securities.
Authorized Participants purchasing and redeeming Creation Units may pay transaction fees directly to the transfer agent. In addition, the Funds may impose certain variable fees on the purchase or redemption of Creation Units for cash, or on transactions effected outside the clearing process, to defray certain transaction costs. These variable fees, if any, are reflected in share transactions in the Statements of Changes in Net Assets.
47 |
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VANECK ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
Note 5—Investments—For the year ended September 30, 2021, purchases and sales of investments (excluding short-term investments and in-kind capital share transactions) and purchases and sales of investments resulting from in-kind capital share transactions (excluding short-term investments) were as follows:
In-Kind Capital Share Transactions | ||||||||||||||||
Fund | Purchases | Sales | Purchases | Sales | ||||||||||||
Inflation Allocation ETF | $ | 8,660,989 | $ | 9,477,167 | $ | 19,085,157 | $ | 13,204,255 | ||||||||
Long/Flat Trend ETF | 165,794 | 536,740 | 10,132,070 | 7,800,900 | ||||||||||||
Morningstar Durable Dividend ETF | 22,090,090 | 23,131,774 | 38,880,376 | 24,484,629 | ||||||||||||
Morningstar Global Wide Moat ETF | 11,490,682 | 11,623,446 | 7,245,017 | — | ||||||||||||
Morningstar International Moat ETF | 72,283,939 | 70,011,904 | 11,219,713 | — | ||||||||||||
Morningstar Wide Moat ETF | 2,379,447,069 | 2,406,399,798 | 4,778,284,328 | 2,769,935,930 | ||||||||||||
Social Sentiment ETF | 417,699,806 | 417,166,917 | 662,726,607 | 477,972,236 |
* | Represents consolidated cost of investments purchased and proceeds from investments sold. |
Note 6—Income Taxes—As of September 30, 2021, for Federal income tax purposes, the identified cost, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) of investments owned were as follows:
Gross | Gross | Net Unrealized | ||||||||||
Tax Cost of | Unrealized | Unrealized | Appreciation | |||||||||
Fund | Investments | Appreciation | Depreciation | (Depreciation) | ||||||||
Inflation Allocation ETF | $ | 15,360,396 | $ | 1,487,978 | $ | (293,396) | $ | 1,194,582 | ||||
Long/Flat Trend ETF | 32,328,428 | 8,755,583 | (202,480) | 8,553,103 | ||||||||
Morningstar Durable Dividend ETF | 49,344,089 | 2,761,735 | (1,151,422) | 1,610,313 | ||||||||
Morningstar Global Wide Moat ETF | 16,264,309 | 3,223,693 | (305,358) | 2,918,335 | ||||||||
Morningstar International Moat ETF | 70,173,395 | 4,946,962 | (4,596,660) | 350,302 | ||||||||
Morningstar Wide Moat ETF | 6,082,555,036 | 641,457,284 | (133,988,387) | 507,468,897 | ||||||||
Social Sentiment ETF | 197,041,503 | 10,774,495 | (14,806,715) | (4,032,220) |
At September 30, 2021, the components of distributable earnings (loss) on a tax basis, for each Fund, were as follows:
Fund |
Undistributed
Ordinary Income |
Accumulated
Capital Losses/ Undistributed Capital Gains |
Other
Temporary Differences |
Unrealized
Appreciation (Depreciation) |
Total
Distributable Earnings (Loss) |
|||||||||||||||
Inflation Allocation ETF | $ | 339,647 | $ | (8,907,362 | ) | $ | (1,762,287 | ) | $ | 1,062,555 | $ | (9,267,447 | ) | |||||||
Long/Flat Trend ETF | 60,956 | (2,851,582 | ) | (1,140 | ) | 8,553,103 | 5,761,337 | |||||||||||||
Morningstar Durable Dividend ETF | 414,511 | (4,388,836 | ) | (625 | ) | 1,610,313 | (2,364,637 | ) | ||||||||||||
Morningstar Global Wide Moat ETF | 763,693 | 233,380 | (211 | ) | 2,918,297 | 3,915,159 | ||||||||||||||
Morningstar International Moat ETF | 1,737,608 | (7,435,470 | ) | (2,056 | ) | 344,893 | (5,355,025 | ) | ||||||||||||
Morningstar Wide Moat ETF | 55,338,453 | (359,896,639 | ) | (128,457 | ) | 507,468,897 | 202,782,254 | |||||||||||||
Social Sentiment ETF | – | (24,826,598 | ) | (147 | ) | (4,032,219 | ) | (28,858,964 | ) |
The tax character of dividends paid to shareholders during the years ended September 30, 2021 and September 30, 2020 were as follows:
2021 | 2020 | |||||||||||||||
Fund |
Ordinary
Income |
Long-Term
Capital Gains |
Ordinary
Income |
|||||||||||||
Inflation Allocation ETF | $ | 870,000 | $ | – | $ | 700,005 | ||||||||||
Long/Flat Trend ETF | 625,013 | – | 1,000,040 | |||||||||||||
Morningstar Durable Dividend ETF | 1,311,545 | – | 991,310 | |||||||||||||
Morningstar Global Wide Moat ETF | 247,940 | 112,140 | 181,250 | |||||||||||||
Morningstar International Moat ETF | 1,260,000 | – | 2,750,000 | |||||||||||||
Morningstar Wide Moat ETF | 58,997,340 | – | 43,002,000 |
48 |
|
At September 30, 2021, 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 | |||||||||
Inflation Allocation ETF | $ | (8,907,362 | ) | $ | – | $ | (8,907,362 | ) | ||||
Long/Flat Trend ETF | (2,767,138 | ) | (84,444 | ) | (2,851,582 | ) | ||||||
Morningstar Durable Dividend ETF | (3,280,928 | ) | (1,107,908 | ) | (4,388,836 | ) | ||||||
Morningstar International Moat ETF | (1,121,585 | ) | (6,313,885 | ) | (7,435,470 | ) | ||||||
Morningstar Wide Moat ETF | (241,017,667 | ) | (118,878,972 | ) | (359,896,639 | ) | ||||||
Social Sentiment ETF | (24,826,598 | ) | – | (24,826,598 | ) |
During the year ended September 30, 2021, Inflation Allocation ETF, Long/Flat Trend ETF and Morningstar International Moat ETF utilized $31,762, $54,124 and $3,557,223, respectively, of their capital loss carryforwards available from prior years.
During the year ended September 30, 2021, as a result of permanent book to tax differences primarily due to the tax treatment of in-kind redemptions, net operating losses and differences in the treatment of income and realized gains from the Inflation Allocation ETF’s controlled foreign corporation subsidiary, the Funds incurred differences that affected distributable earnings / (loss) and aggregate paid in capital by the amounts in the table below. Net assets were not affected by these reclassifications.
Increase | Increase | |||||||
(Decrease) | (Decrease) | |||||||
in Total Distributable | in Aggregate | |||||||
Fund | Earnings (Loss) | Paid in Capital | ||||||
Inflation Allocation ETF | $ | (2,103,666 | ) | $ | 2,103,666 | |||
Long/Flat Trend ETF | (1,913,599 | ) | 1,913,599 | |||||
Morningstar Durable Dividend ETF | (4,183,247 | ) | 4,183,247 | |||||
Morningstar Wide Moat ETF | (816,453,524 | ) | 816,453,524 | |||||
Social Sentiment ETF | (36,266,179 | ) | 36,266,179 |
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by applicable tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on return filings for all open tax years. The Funds do not have exposure for additional years that might still be open in certain foreign jurisdictions. Therefore, no provision for income tax is required in the Funds’ financial statements. However, certain Funds are subject to foreign taxes on the appreciation in value of certain investments. The Funds provide for such taxes on both realized and unrealized appreciation.
The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the year ended September 30, 2021, the Funds did not incur any interest or penalties.
Note 7—Principal Risks—Non-diversified funds generally hold securities of fewer issuers than diversified funds (See Note 1) and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers. The Funds may purchase securities on foreign exchanges. Securities of foreign issuers involve special risks and considerations not typically associated with investing in U.S. issuers. These risks include devaluation of currencies, currency controls, less reliable information about issuers, different securities transaction clearance and settlement practices, future adverse economic developments and political conflicts, or natural or other disasters, such as the recent coronavirus outbreak. Additionally, certain Funds may invest in securities of emerging market issuers, which are exposed to a number of risks that may make these investments volatile in price or difficult to trade. Political risks may include unstable governments, nationalization, restrictions on foreign ownership, laws that prevent investors from getting their money out of a country, sanctions and investment restrictions and legal systems that do not protect property risks as well as the laws of the United States. These and other factors can make emerging market securities more volatile and potentially less liquid than securities issued in more
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VANECK ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
developed markets. Certain securities of Chinese issuers are, or may in the future become restricted, and the Funds may be forced to sell such restricted securities and incur a loss as a result.
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.
Inflation 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. In addition, the Fund may gain exposure to the cryptocurrency Bitcoin by investing in pooled investment vehicles that invest in Bitcoin, which generally operates without central authority (such as a bank) and is not backed by any government; nor is it legal tender. Federal, state and/or foreign governments may restrict the use and exchange of cryptocurrencies, and regulation in the United States is still developing. Cryptocurrencies are susceptible to theft, loss and destruction. Accordingly, the Fund’s indirect investment in Bitcoin is also susceptible to these risks. Cryptocurrency exchanges have in the past, and may in the future, stop operating or permanently shut down due to fraud, cybersecurity issues, manipulation, technical glitches, hackers or malware, which may also affect the price of Bitcoin and thus the Fund’s indirect investment in Bitcoin.
Social Sentiment ETF may concentrate its investment in the information technology and communication services sector. The Fund will be sensitive to, and its performance may depend to a greater extent on, the overall condition of these sectors. Information technology companies face intense competition, both domestically and internationally, which may have an adverse effect on profit margins. The products of information technology companies may face product obsolescence due to rapid technological developments and frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Companies in the information technology sector are heavily dependent on patent protection and the expiration of patents may adversely affect the profitability of these companies. Companies in the communication services sector may be affected by industry competition, substantial capital requirements, government regulations and obsolescence of communications products and services due to technological advancement. The index provider relies on social media analytics, which are relatively new and untested. Investing in companies based on social media analytics involves the potential risk of market manipulation because social media posts may be made with an intent to inflate, or otherwise manipulate, the public perception of a company stock or other investment. Furthermore, text and sentiment analysis of social media postings may prove inaccurate in predicting a company’s stock performance.
The respiratory disease caused by a novel coronavirus, which has spread internationally and declared as a pandemic by the World Health Organization, has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, loss of life, as well as general concern and uncertainty. The coronavirus has already negatively impacted the economies of many nations, individual companies, and the market. This pandemic is expected to have a continued impact in ways that cannot necessarily be foreseen presently.
A more complete description of risks is included in each Fund’s Prospectus and Statement of Additional Information.
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.
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Except for the Social Sentiment ETF, the expense for the Plan is included in “Trustees’ fees and expenses” in the Statements of Operations, and the liability for the Plan is shown as “Deferred Trustee fees” in the Statements of Assets and Liabilities. The Adviser is responsible for paying the expenses associated with the Plan for the Social Sentiment ETF, and therefore the Fund bears no costs or liabilities relative to the Plan.
Note 9—Securities Lending—To generate additional income, each of the Funds may lend its securities pursuant to a securities lending agreement with the securities lending agent. Each Fund may lend up to 33% of its investments requiring that the loan be continuously collateralized by cash, cash equivalents, U.S. government securities, or any combination of cash and such securities at all times equal to at least 102% (105% for foreign securities) of the market value of securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled on the next business day. During the term of the loan, the Funds will continue to receive any dividends, interest or amounts equivalent thereto, on the securities loaned while receiving a fee from the borrower and or earning interest on the investment of the cash collateral. Such fees and interest are shared with the securities lending agent under the terms of the securities lending agreement. Securities lending income is disclosed as such in the Statements of Operations. Cash collateral is maintained on the Funds’ behalf by the lending agent and is invested in the State Street Navigator Securities Lending Government Money Market Portfolio. Non-cash collateral consists of U.S. Treasuries and U.S. Government Agency securities, and is not disclosed in the Funds’ Schedules of Investments or Statements of Assets and Liabilities as it is held by the agent on behalf of the Funds. The Funds do not have the ability to re-hypothecate those securities. Loans are subject to termination at the option of the borrower or the Funds. Upon termination of the loan, the borrower will return to the Fund securities identical to the securities loaned. The Funds bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The value of loaned securities and related cash collateral, if any, at September 30, 2021, is presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities. The following is a summary of the Funds’ securities on loan and related collateral as of September 30, 2021:
Fund |
Market Value
of Securities on Loan |
Cash
Collateral |
Non-Cash
Collateral |
Total
Collateral |
||||||||||||
Inflation Allocation ETF | $ | 3,377,660 | $ | 17,691 | $ | 3,448,050 | $ | 3,465,741 | ||||||||
Long/Flat Trend ETF | 6,769,482 | – | 7,002,937 | 7,002,937 | ||||||||||||
Morningstar Global Wide Moat ETF | 153,978 | – | 162,227 | 162,227 | ||||||||||||
Morningstar International Moat ETF | 3,438,469 | – | 3,625,963 | 3,625,963 | ||||||||||||
Social Sentiment ETF | 17,589,466 | – | 18,036,175 | 18,036,175 |
The following table presents money market fund investments held as collateral by type of security on loan as of September 30, 2021:
Gross Amount of
Recognized Liabilities for Securities Lending Transactions* in the Statements of Assets and Liabilities |
||||
Fund | Equity Securities | |||
Inflation Allocation ETF | $ | 17,691 |
* | Remaining contractual maturity: overnight and continuous |
Note 10—Bank Line of Credit—The Funds may participate in a $200 million committed credit facility (the “Facility”) to be utilized for temporary financing 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 based on prevailing market rates in effect at
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VANECK ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
the time of borrowings. During the year ended September 30, 2021, the following Funds borrowed under this Facility:
Average | ||||||||||
Days | Daily | Average | ||||||||
Fund | Outstanding | Loan Balance | Interest Rate | |||||||
Inflation Allocation ETF | 9 | $ | 470,087 | 1.45 | % | |||||
Morningstar Durable Dividend ETF | 102 | 125,741 | 1.44 | |||||||
Morningstar Global Wide Moat ETF | 1 | 149,840 | 1.46 | |||||||
Morningstar International Moat ETF | 267 | 218,981 | 1.44 | |||||||
Morningstar Wide Moat ETF | 178 | 6,526,172 | 1.44 | |||||||
Social Sentiment ETF | 52 | 203,723 | 1.45 |
Outstanding loan balances as of September 30, 2021, if any, are reflected in the Statements of Assets and Liabilities.
Note 11—Subsequent Event Review—The Funds have evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements were issued.
Effective October 1, 2021, the Morningstar Durable Dividend ETF converted to a unitary management fee structure, pursuant to which the Adviser has agreed to pay all of the expenses the Fund (excluding the fee payment under the investment management agreement of 0.29% of average net assets, acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes, and extraordinary expenses).
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VANECK ETF TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of VanEck Inflation Allocation ETF, VanEck Long/Flat Trend ETF, VanEck Morningstar Durable Dividend ETF, VanEck Morningstar Global Wide Moat ETF, VanEck Morningstar International Moat ETF, VanEck Morningstar Wide Moat ETF and VanEck Social Sentiment ETF and the Board of Trustees of VanEck ETF Trust
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities (consolidated as it relates to VanEck Inflation Allocation ETF) of VanEck Inflation Allocation ETF, VanEck Long/Flat Trend ETF, VanEck Morningstar Durable Dividend ETF, VanEck Morningstar Global Wide Moat ETF, VanEck Morningstar International Moat ETF, VanEck Morningstar Wide Moat ETF and VanEck Social Sentiment ETF (collectively referred to as the “Funds”) (seven of the series constituting VanEck ETF Trust (the “Trust”)), including the schedules of investments (consolidated as it relates to VanEck Inflation Allocation ETF), as of September 30, 2021, and the related statements of operations, changes in net assets, and the financial highlights (consolidated as it relates to VanEck Inflation Allocation ETF) for each of the periods indicated in the table below and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position (consolidated as it relates to VanEck Inflation Allocation ETF) of each of the Funds (seven of the series constituting VanEck ETF Trust) at September 30, 2021, and the results of their operations, changes in net assets and financial highlights (consolidated as it relates to VanEck Inflation Allocation ETF) for each of the periods indicated in the table below, in conformity with U.S. generally accepted accounting principles.
Individual fund constituting | Statement of | Statements of Changes in Net | Financial Highlights | |||
the VanEck ETF Trust | Operations | Assets | ||||
VanEck Inflation Allocation ETF | For the year ended September 30, 2021 | For each of the two years in the period ended September 30, 2021 | For each of the three years in the period ended September 30, 2021 and the period from April 9, 2018 (commencement of operations) through September 30, 2018 | |||
VanEck Long/Flat Trend ETF | For the year ended September 30, 2021 | For each of the two years in the period ended September 30, 2021 | For each of the three years in the period ended September 30, 2021 and the period from October 4, 2017 (commencement of operations) through September 30, 2018 | |||
VanEck Morningstar Durable Dividend ETF
VanEck Morningstar Global Wide Moat ETF
|
For the year ended September 30, 2021 | For each of the two years in the period ended September 30, 2021 | For each of the two years in the period ended September 30, 2021 and the period from October 30, 2018 (commencement of operations) through September 30, 2019 | |||
VanEck Morningstar International Moat ETF
VanEck Morningstar Wide Moat ETF
|
For the year ended September 30, 2021 | For each of the two years in the period ended September 30, 2021 | For each of the five years in the period ended September 30, 2021 | |||
VanEck Social Sentiment ETF | For the period from March 3, 2021 (commencement of operations) through September 30, 2021 | For the period from March 3, 2021 (commencement of operations) through September 30, 2021 | For the period from March 3, 2021 (commencement of operations) through September 30, 2021 |
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VANECK ETF TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued)
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on each of the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2021, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from broker were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more of the VanEck investment companies since 1999.
New York, New York
November 19, 2021
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VANECK ETF TRUST
(unaudited)
The information set forth below relates to distributions paid during each Fund’s current fiscal year as required by federal laws. Shareholders, however, must report dividends on a calendar year basis for income tax purposes, which may include dividends for portions of two fiscal years of a Fund.
Accordingly, the information needed by shareholders for calendar year 2021 income tax purposes will be sent to them in early 2022. Please consult your tax advisor for proper treatment of this information.
The following information is provided with respect to the distributions paid during the taxable year ended September 30, 2021:
Dividends | ||||||||||||||||||||||||||||||||
Qualifying | Qualified | |||||||||||||||||||||||||||||||
for the | Short- | |||||||||||||||||||||||||||||||
Dividend | Term | |||||||||||||||||||||||||||||||
Qualified | Received | Foreign | Federal | Capital | Long-Term | |||||||||||||||||||||||||||
Ordinary Income | Dividend | Deduction | Foreign | Taxes | Obligation | Gains | Capital | |||||||||||||||||||||||||
Amount Paid | Income for | for | Source | Paid Per | Interest | Per | Gain Per | |||||||||||||||||||||||||
Fund | Per Share | Individuals* | Corporations* | Income* | Share** | *** | Share**** | Share | ||||||||||||||||||||||||
Inflation Allocation ETF | $1.39200 | 5.32% | 0.58% | –% | $– | 1.74% | $– | $– | ||||||||||||||||||||||||
Long/Flat Trend ETF | 0.71430 | 100.00 | 100.00 | – | – | – | – | – | ||||||||||||||||||||||||
Morningstar Durable Dividend ETF | 0.91380 | 100.00 | 100.00 | – | – | – | – | – | ||||||||||||||||||||||||
Morningstar Global Wide Moat ETF | 0.70840 | 100.00 | 58.84 | – | – | – | 0.279800 | 0.320400 | ||||||||||||||||||||||||
Morningstar International Moat ETF | 0.72000 | 78.30 | 0.19 | 99.02 | 0.070550 | – | – | – | ||||||||||||||||||||||||
Morningstar Wide Moat ETF | 0.90210 | 100.00 | 100.00 | – | – | – | – | – |
* Expressed as a percentage of the cash distribution grossed up for foreign taxes.
** The foreign taxes paid represent taxes incurred by the Fund on income received by the Fund from foreign sources. Foreign taxes paid may be included in taxable income with an offsetting deduction from gross income or may be taken as a credit for taxes paid to foreign governments.
*** Certain states may exempt the portion of dividends derived from assets backed by the full faith and credit of the U.S. Government.
**** These amounts represent Qualified Short-Term Capital Gains (“QSTG”) which may be exempt from United States withholding tax when distributed to non-U.S. shareholders with proper documentation.
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VANECK ETF TRUST
BOARD OF TRUSTEES AND OFFICERS
September 30, 2021 (unaudited)
1 | The address for each Trustee and officer is 666 Third Avenue, 9th Floor, New York, New York 10017. |
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2 | Each Trustee serves until resignation, death, retirement or removal. Officers are elected yearly by the Trustees. |
3 | The Fund Complex consists of the VanEck Funds, VanEck VIP Trust and the Trust. |
4 | The MainStay Fund Complex consists of MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust and MainStay MacKay Defined Term Municipal Opportunities Fund. |
5 | Interested person” of the Trust within the meaning of the 1940 Act. Mr. van Eck is an officer of VEAC, VEARA and VESC. |
* | Member of the Audit Committee. |
† | Member of the Nominating and Corporate Governance Committee. |
Officer’s Name, | Position(s) | Term of Office2 | ||||
Address1 and | Held with | And Length of | ||||
Year of Birth | the Trust | Time Served | Principal Occupation(s) During Past Five Years | |||
Officer Information | ||||||
Matthew A. Babinsky,
1983 |
Assistant Vice President and Assistant Secretary | Since 2016 | Assistant Vice President, Assistant General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Associate, Clifford Chance US LLP. | |||
Russell G. Brennan,
1964 |
Assistant Vice President and Assistant Treasurer | Since 2008 | Assistant Vice President of VEAC; Officer of other investment companies advised by VEAC and VEARA. | |||
Charles T. Cameron,
1960 |
Vice President | Since 2006 | Portfolio Manager of VEAC; Officer and/or Portfolio Manager of other investment companies advised by VEAC and VEARA. Formerly, Director of Trading of VEAC. | |||
John J. Crimmins,
1957 |
Vice President, Treasurer, Chief Financial Officer and Principal Accounting Officer | Vice President, Chief Financial Officer and Principal Accounting Officer (Since 2012); Treasurer (Since 2009) | Vice President of VEAC and VEARA; Officer of other investment companies advised by VEAC and VEARA. Formerly, Vice President of VESC. | |||
Eduardo Escario,
1975 |
Vice President | Since 2012 | Regional Director, Business Development/Sales for Southern Europe and South America of VEAC. | |||
F. Michael Gozzillo,
1965 |
Chief Compliance Officer | Since 2018 | Vice President and Chief Compliance Officer of VEAC and VEARA; Chief Compliance Officer of VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Chief Compliance Officer of City National Rochdale, LLC and City National Rochdale Funds. | |||
Laura Hamilton,
1977 |
Vice President | Since 2019 | Assistant Vice President of VEAC and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Operations Manager of Royce & Associates. | |||
Nicholas Jackson,
1974 |
Assistant Vice President | Since 2018 | Director, Business Development of VanEck Australia Pty Ltd. Formerly, Vice President, Business Development of VanEck Australia Pty Ltd. | |||
Laura I. Martínez,
1980 |
Vice President and Assistant Secretary |
Vice President
(Since 2016); Assistant Secretary (Since 2008) |
Vice President, Associate General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Assistant Vice President of VEAC, VEARA and VESC. | |||
Matthew McKinnon,
1970 |
Assistant Vice President | Since 2018 | Head of Business Development of Asia Pacific of VanEck Australia Pty Ltd. Formerly, Director, Intermediaries and Institutions of VanEck Australia Pty Ltd. | |||
Arian Neiron,
1979 |
Vice President | Since 2018 | Managing Director and Head of Asia Pacific of VanEck Australia Pty Ltd.; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. | |||
James Parker,
1969 |
Assistant Treasurer | Since 2014 | Assistant Vice President of VEAC; Manager, Portfolio Administration of VEAC and VEARA. Officer of other investment companies advised by VEAC and VEARA. | |||
Adam Phillips,
1970 |
Vice President | Since 2018 | ETF Chief Operating Officer of VEAC; Director of other companies affiliated with VEAC. | |||
Philipp Schlegel,
1974 |
Vice President | Since 2016 | Managing Director of Van Eck Switzerland AG. |
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VANECK ETF TRUST
BOARD OF TRUSTEES AND OFFICERS (unaudited) (continued)
Jonathan R. Simon,
1974 |
Senior Vice President, Secretary and Chief Legal Officer | Senior Vice President (Since 2016); Secretary and Chief Legal Officer (since 2014) | Senior Vice President, General Counsel and Secretary of VEAC, VEARA and VESC; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. Formerly, Vice President of VEAC, VEARA and VESC. | |||
Andrew Tilzer,
1972 |
Assistant Vice President | Since 2021 | Vice President of Portfolio Administration of VEAC. Formerly, Assistant Vice President, Portfolio Operations of VEAC. |
1 | The address for each Officer is 666 Third Avenue, 9th Floor, New York, New York 10017. |
2 | Officers are elected yearly by the Trustees. |
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VANECK ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2021 (unaudited)
At a meeting held on June 17, 2021 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of VanEck® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved the continuation of the investment management agreements between the Trust and Van Eck Associates Corporation (the “Adviser”) (the “Investment Management Agreements”) with respect to the VanEck Biotech ETF, Digital Transformation ETF, Environmental Services ETF, Gaming ETF, Long/Flat Trend ETF, Morningstar Durable Dividend ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF, Morningstar Wide Moat ETF, Pharmaceutical ETF, Retail ETF, Semiconductor ETF, Social Sentiment ETF and Video Gaming and eSports ETF (each, a “Fund” and together, the “Funds”).
The Board’s approval of the Investment Management Agreements was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.
In preparation for the Renewal Meeting, the Trustees held a meeting on May 7, 2021 (the “May Meeting”). At that meeting, the Trustees discussed the information the Adviser and Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party data provider, had provided to them in advance. The information provided to the Trustees included, among other things, information about the performance and expenses of the Funds and the Funds’ peer funds (certain other index-based exchange-traded funds (“ETFs”)), information about the advisory services provided to the Funds and the personnel providing those services, and the profitability and other benefits enjoyed by the Adviser and its affiliates as a result of the Adviser’s relationship with the Funds. In reviewing performance information for the Funds against their peer groups, the Trustees considered that each Fund seeks to track a different index than the funds in its designated peer group and, therefore, each Fund’s performance will differ from its peers. They also considered the fact that each of the VanEck Digital Transformation ETF and Social Sentiment ETF had only recently commenced operations and therefore each had a limited operational history that could be used for comparative purposes, since tracking error measurements and the performance comparisons provided by Broadridge were not available for each Fund, while the expense information prepared by Broadridge was only available for the VanEck Social Sentiment ETF. In addition, as noted below, the Trustees reviewed certain performance information for each Fund which was not provided by Broadridge and which did not compare each Fund’s performance to the performance of its peer group. The Trustees noted that the peer group performance information did not necessarily provide meaningful direct comparisons to the Funds.
The Independent Trustees’ consideration of the Investment Management Agreements was based, in part, on their review of information obtained through discussions with the Adviser at the Renewal Meeting and with the Adviser at the May Meeting regarding the management of the Funds and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others involved in the management and administration of the Funds. The Trustees also considered the terms of, and scope of services that the Adviser provides under, the Investment Management Agreements, including, where applicable, the Adviser’s commitment to waive certain fees and/or pay expenses of each of the Funds to the extent necessary to prevent the operating expenses of each of the Funds from exceeding agreed upon limits for a period of time.
The Trustees concluded that the Adviser and its personnel have the requisite expertise and skill to manage the Funds’ portfolios. In evaluating the performance of each Fund, the Trustees reviewed various performance metrics but relied principally on a comparison of the “gross” performance of each Fund (i.e., measured without regard to the impact of fees and expenses) to the performance of its benchmark index, in each case incorporating any systematic fair value adjustments to the underlying securities. Based on the foregoing, the Trustees concluded that the investment performance of the Funds was satisfactory.
The Trustees also considered information relating to the financial condition of the Adviser and the current status, as they understood it, of the Adviser’s compliance environment.
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VANECK ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2021 (unaudited) (continued)
As noted above, the Trustees were also provided various data from Broadridge comparing the Funds’ expenses and performance to that of certain other ETFs. The Trustees noted that the information provided showed that each Fund had management fees (after the effect of any applicable fee waiver) below the average and median of its respective peer group of funds, except for the VanEck Morningstar Wide Moat ETF and Social Sentiment ETF, each of which had management fees (after the effect of any applicable fee waiver) above the average and median of its peer group of funds. The Trustees also noted that the information provided showed that each Fund (except as noted below) had a total expense ratio (after the effect of any applicable expense limitation) below the average and median of its respective peer group of funds and the VanEck Environmental Services ETF had a total expense ratio (after the effect of any applicable expense limitation) below the average and equal to the median of its peer group of funds, while each of the VanEck Gaming ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF and Morningstar Wide Moat ETF had a total expense ratio (after the effect of any applicable expense limitation) greater than the average and median of its respective peer group of funds and the VanEck Social Sentiment ETF had a total expense ratio (after the effect of any applicable expense limitation) greater than the average and equal to the median of its peer group of funds. The Trustees reviewed the amount by which certain Funds’ management fees and/or total expense ratios (after the effect of any applicable expense limitation) exceeded the average and/or median of their respective peer groups and information provided by the Adviser providing context for these comparisons. The Trustees concluded, in light of this information and the other information available to them, that the fees paid by the Funds were reasonable in light of the performance of the Funds and the quality of services received.
The Trustees also considered the benefits, other than the fees under the Investment Management Agreements, received by the Adviser from serving as adviser to the Funds.
The Trustees also considered information provided by the Adviser about the overall profitability of the Adviser and its profitability or loss in respect of each Fund. The Trustees reviewed each Fund’s asset size, expense ratio and expense cap and noted that the Investment Management Agreements do not include breakpoints in the advisory fee rates as asset levels in a Fund increase. The Trustees considered the volatility of the asset classes in which certain of the Funds invest, potential variability in the net assets of these Funds and the sustainability of any potential economies of scale which may exist given where fees are currently set. The Trustees also evaluated the extent to which management fees for the Funds effectively incorporate the benefits of economies of scale. The Trustees noted that the Adviser has capped expenses on each Fund since its inception, although the cap was not necessarily exceeded each year. Based on the foregoing and the other information available to them, the Trustees determined that the advisory fee rate for each Fund is reasonable and appropriate in relation to the current asset size of each Fund and the other factors discussed above and that the advisory fee rate for each Fund currently reflects an appropriate sharing with shareholders of any economies of scale which may exist. The Trustees also determined that the profits earned by the Adviser with respect to the Funds that were profitable to the Adviser were reasonable in light of the nature and quality of the services received by such Funds.
The Independent Trustees were advised by and met in executive session with their independent counsel at the Renewal Meeting and at their May Meeting as part of their consideration of the Investment Management Agreements.
Subsequent to the approval of the Investment Management Agreements at the Renewal Meeting, at a meeting held on September 14, 2021 (the “September Meeting”), the Board of the Trust, including all of the Independent Trustees, approved amended and restated Investment Management Agreements (the “Amended and Restated Investment Management Agreements”) between the Trust and the Adviser to (i) convert the VanEck Biotech ETF, VanEck Pharmaceutical ETF, VanEck Retail ETF, VanEck Semiconductor ETF and VanEck Morningstar Durable Dividend ETF (each, a “Converting Fund”) to a unitary fee structure, pursuant to which the Adviser will pay all of the direct expenses of each Converting Fund (excluding fees under the Amended and Restated Investment Management Agreement, acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses) in exchange for an annual unitary management fee rate equal to the existing management fee rate for each Converting Fund, and (ii) to reduce
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the unitary management fee rate with respect to the VanEck Digital Transformation ETF. The Investment Management Agreements and the Amended and Restated Investment Management Agreements are collectively referred to as the “Agreements.”
The Board’s approval of the Amended and Restated Investment Management Agreements was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. In approving the Amended and Restated Investment Agreement, the Trustees also considered the information about the expenses of each Converting Fund and VanEck Digital Transformation ETF they received at the Renewal Meeting to approve the Investment Management Agreements, as well as additional information obtained at other meetings of the Board. Some of the additional 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.
Among other things, the Trustees considered the terms and scope of services that the Adviser would provide under the Amended and Restated Investment Management Agreements and representations from the Adviser that the services to be provided by the Adviser to the Converting Funds and VanEck Digital Transformation ETF would not decrease in scope or quality under the unitary fee structure or the reduced unitary management fee rate, respectively. The Trustees also considered the risks being assumed by the Adviser under the unitary fee structure and the potential expense stability that may inure to the benefit of shareholders of the Converting Funds.
The Independent Trustees were advised by and met in executive session with their independent counsel at their September Meeting as part of their consideration of the Amended and Restated Investment Management Agreements.
In voting to approve the continuation of the Investment Management Agreements and the adoption of the Amended and Restated Investment Management Agreements, the Trustees, including the Independent Trustees, concluded that the terms of each 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, at the time of their considerations, each Agreement is in the best interest of each Fund and such Fund’s shareholders.
VanEck Inflation Allocation ETF
At a meeting held on June 17, 2021 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of VanEck® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved the continuation of the investment management agreement between the Trust and Van Eck Absolute Return Advisers Corporation (the “Adviser”) (the “Investment Management Agreement”) with respect to the VanEck Inflation Allocation ETF (the “Fund”).
The Board’s approval of the Investment Management Agreement was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.
In preparation for the Renewal Meeting, the Trustees held a meeting on May 7, 2021. At that meeting, the Trustees discussed the information the Adviser and Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party data provider, had provided to them in advance. The information provided to the Trustees included, among other things, information about the performance and expenses of the Fund and the Fund’s peer funds (certain other exchange-traded funds (“ETFs”)), information about the advisory services provided to the Fund and the personnel providing those services, and the profitability (or the absence of profitability) and the benefits enjoyed by the Adviser and its affiliates as a result of the Adviser’s relationship with the Fund. In addition, as noted below, the Trustees reviewed certain performance information for the Fund which was not provided by Broadridge and which did not compare the Fund’s performance to the
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VANECK ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2021 (unaudited) (continued)
performance of its peer group. The Trustees noted that the peer group performance information did not necessarily provide meaningful direct comparisons to the Fund.
The Independent Trustees’ consideration of the Investment Management Agreement was based, in part, on their review of information obtained through discussions with the Adviser at the Renewal Meeting and with the Adviser at the May 7, 2021 meeting regarding the management of the Fund and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others involved in the management and administration of the Fund. The Trustees also considered the terms of, and scope of services that the Adviser provides under, the Investment Management Agreement, including the Adviser’s commitment to waive certain fees and/or pay expenses of the Fund to the extent necessary to prevent the operating expenses of the Fund from exceeding an agreed upon limit for a period of time.
In evaluating the performance of the Fund, the Trustees reviewed various performance metrics, including various data from Broadridge comparing the Fund’s performance to that of certain other ETFs. The Trustees also considered information from the Adviser regarding the performance of the Fund against its benchmark and the Adviser’s statement that the Fund’s performance against its benchmark is more relevant than performance against its peer group, given the small number of funds with directly competing strategies. The Trustees noted that the Fund had underperformed its benchmark for the one- and two-year periods ended December 31, 2020 and for the period since its inception on April 10, 2018 through December 31, 2020, but also that the Fund’s risk profile was lower than that of its benchmark during these periods. Based on the foregoing, the Trustees concluded that the Adviser and its personnel have the requisite expertise and skill to manage the Fund’s portfolio.
The Trustees also considered information relating to the financial condition of the Adviser and the current status, as they understood it, of the Adviser’s compliance environment.
As noted above, the Trustees were also provided various data from Broadridge comparing the Fund’s expenses and performance to that of certain other ETFs. The Trustees noted that the information provided showed that the Fund had management fees (after the effect of any applicable fee waiver) below the average and median of its peer group of funds. The Trustees also noted that the information provided showed that the Fund had a total expense ratio (after the effect of any applicable expense limitation) greater than the average and median of its peer group of funds. The Trustees reviewed the amount by which the Fund’s total expense ratio exceeded the average and median of its peer group and information provided by the Adviser providing context for these comparisons. The Trustees concluded, in light of this information and the other information available to them, that the fees paid by the Fund were reasonable in light of the performance of the Fund and the quality of services received.
The Trustees also considered the benefits, other than the fees under the Investment Management Agreement, received by the Adviser from serving as adviser to the Fund.
The Trustees also considered information provided by the Adviser about the overall profitability of the Adviser and the fact that the Adviser did not earn any profits from managing the Fund. The Trustees reviewed the Fund’s asset size, expense ratio and expense cap and noted that the Investment Management Agreement does not include breakpoints in the advisory fee rates as asset levels in the Fund increase. The Trustees considered the volatility of the asset classes in which the Fund invests, potential variability in the net assets of the Fund and the sustainability of any potential economies of scale which may exist given where fees are currently set. The Trustees also evaluated the extent to which management fees for the Fund effectively incorporate the benefits of economies of scale. The Trustees noted that the Adviser has capped expenses on the Fund since its inception. Based on the foregoing and the other information available to them, the Trustees determined that the advisory fee rate for the Fund is reasonable and appropriate in relation to the current asset size of the Fund and the other factors discussed above and that the advisory fee rate for the Fund currently reflects an appropriate sharing with shareholders of any economies of scale which may exist.
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The Independent Trustees were advised by and met in executive session with their independent counsel at the Renewal Meeting and at their May 7, 2021 meeting as part of their consideration of the Investment Management Agreement.
In voting to approve the continuation of the Investment Management Agreement, the Trustees, including the Independent Trustees, concluded that the terms of the Investment Management Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded that, at the time of their considerations, the Investment Management Agreement is in the best interest of the Fund and the Fund’s shareholders.
VanEck Morningstar ESG Moat ETF
At a meeting held on June 17, 2021 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of VanEck® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved the continuation of the investment management agreement between the Trust and Van Eck Associates Corporation (the “Adviser”) (the “Investment Management Agreement”) with respect to the VanEck Morningstar ESG Moat ETF (the “Fund”).
The Board’s approval of the Investment Management Agreement was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.
In preparation for the Renewal Meeting, the Trustees held a meeting on May 7, 2021. At that meeting, the Trustees received materials from the Adviser. The Independent Trustees’ consideration of the Investment Management Agreement was based, in part, on information obtained through discussions with the Adviser at the Renewal Meeting and with the Adviser at the May 7, 2021 meeting regarding the proposed management of the Fund and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others proposed to be involved in the management and administration of the Fund. In evaluating the terms of the Investment Management Agreement at the Renewal Meeting and the May 7, 2021 meeting, the Trustees considered the terms and scope of services that the Adviser would provide under the Investment Management Agreement, including the Adviser’s agreement to pay all of the direct expenses of the Fund (excluding the fee payment under the Investment Management Agreement, acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses). The Trustees concluded that the Adviser and its personnel have the requisite expertise and skill to manage the Fund’s portfolio.
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. 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 Renewal Meeting and at their May 7, 2021 meeting as part of their consideration of the Investment Management Agreement.
In voting to approve the continuation of the Investment Management Agreement, the Trustees, including the Independent Trustees, concluded that the terms of the Investment Management Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded
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VANECK ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2021 (unaudited) (continued)
that, at the time of their considerations, the Investment Management Agreement is in the best interest of the Fund and its shareholders.
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This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by a VanEck 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: | VanEck Associates Corporation | |
Distributor: | VanEck Securities Corporation | |
666 Third Avenue, New York, NY 10017 | ||
vaneck.com | ||
Account Assistance: | 800.826.2333 | STRATAR |
|
ANNUAL
REPORT
September 30, 2021 |
Energy Income ETF | EINC® |
800.826.2333 | vaneck.com |
|
Certain information contained in this report represents the opinion of the investment adviser which may change at any time. This information is not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue. The information contained herein regarding each index has been provided by the relevant index provider. Also, unless otherwise specifically noted, any discussion of the Fund’s holdings, the Fund’s performance, and the views of the investment adviser are as of September 30, 2021.
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VANECK ENERGY INCOME ETF
September 30, 2021
(unaudited)
Dear Fellow Shareholders:
This letter addresses two topics: first, the risks to the markets today and, second, two multi-year themes.
The Economy
When we think about financial markets, since the future remains unknown, we seek to identify potential scenarios. At the beginning of this year, the global economy was like a car hurtling forward at 200 miles per hour. Over the summer, we expected an orderly slowdown, asking only “What are the risks to Goldilocks?”1 We thought the car could slow to 70 miles per hour without putting too much pressure on interest rates, driven by inflation, which would upset the financial markets. The markets today are pondering the question, “Are we hitting the brakes too hard?” I think not.
In the U.S., will the U.S. Federal Reserve (Fed) hit the brakes too hard? I don’t think so. First, while the financial markets are still debating whether we have an inflation problem, I don’t think we will know whether we have permanent inflation until late next year. It is true that we are talking about supply chain issues and labor market issues longer than the transitory camp would like. But while commodity price inflation matters, the real concern about inflation and financial markets is wage inflation, since it tends to be longer-lasting and may affect long-term interest rates.
Second, if inflation doesn’t push rates higher, I don’t think the Fed will hit the brakes too hard by raising rates. Bank of America recently released a research note2 that said over half of the S&P 500® Index’s returns in the past decade can be attributed to the Fed’s balance sheet expansion, rather than earnings. We live in an era in which the Fed has an eye on the financial markets. Why would that change?
What about China? Will real estate or other factors like COVID-19 cause a recession? While China growth is becoming soggy, we think policy makers have all the tools, including liquidity moves, to avoid a crash.
Multi-Year Investment Themes
So what to do in your portfolio? We are focusing on two multi-year investment themes.
The first theme is the energy transition away from fossil fuels. We see this not only as being driven by government policy, but also by innovation in the private sector. In our resources portfolios, we’re looking for disruptive companies in the sectors that need to be more energy efficient. One is agriculture (which emits about as much CO2 as the energy sector). AgTech businesses are embracing technology to modernize agriculture, leading to higher crop yields, safer crop chemicals and other innovations in food production to provide healthy diets for the world’s growing population.
The second theme is the use of blockchain in a large variety of industries, but especially finance and entertainment. New open-source database technology is enabling incredibly rapid adoption and at much lower cost than traditional companies using prior generation technology. The fintech revolution that goes hand in hand with crypto is something we find really exciting. There are some over-valued companies, but we think it’s another interesting multi-year trend that investors should consider.
Another surprise that has affected commodity prices is that, as the economy grows and demand for commodities grows, increasing supply has become harder. This is in part due to environmental, social and governance (ESG) policies in place, causing “greenflation” and a multi-year trend of price pressure. Finding supply sources like new copper, lithium or gold mines is harder because of, to a certain extent, the environmental impact of these activities. I think this supply issue will continue to underpin commodity prices, and is why I believe that commodity equities are an interesting investment that people should have in their portfolios.
We sincerely thank you for investing in VanEck’s investment strategies. On the following pages, you will find a performance discussion and financial statements for the twelve month period ended September 30, 2021. As always, we value your continued confidence in us and look forward to helping you meet your investment goals in the future.
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VANECK ENERGY INCOME ETF
PRESIDENT’S LETTER
(unaudited) (continued)
Jan F. van Eck
CEO and President
VanEck ETF Trust
October 18, 2021
1 | A Goldilocks economy is an economy that is not so hot that it causes inflation and not so cold that it causes a recession. |
2 | Source: Bloomberg, https://www.bloomberg.com/news/articles/2021-09-08/bofa-s-subramanian-dumps-dire-stock-call-to-catch-up-with-rally |
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VANECK ENERGY INCOME ETF
September 30, 2021 (unaudited)
As the world started to claw its way out from the COVID-19 pandemic, robust and rising energy commodity prices during the period under review benefited midstream energy companies, including MLPs (master limited partnerships). Both crude oil and natural gas prices recovered strongly, as did demand. Having started the 12 month period at $38.72 a barrel, after a few hiccups on the way, West Texas Intermediate (WTI) ended the period 48.39% higher at $75.03 a barrel. The outlook for energy infrastructure remains encouraging as demand has increased in the U.S. for natural gas, gasoline, diesel and jet oil.
For the 12 months ended September 30, 2021, the VanEck Energy Income ETF gained 68.88% on a total return basis. The three greatest contributors to performance were all involved, in particular, in the natural gas market: Targa Resources (4.9% of Fund net assets†), ONEOK (5.9% of Fund net assets†) and Cheniere Energy (6.3% of Fund net assets†). Only two companies, CNX Resources (1.4% of Fund net assets†) and New Fortress Energy (sold before end of period) detracted from overall performance.
† All Fund assets referenced are Total Net Assets as of September 30, 2021.
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VANECK ENERGY INCOME ETF
September 30, 2021 (unaudited)
Average Annual Total Return | ||||
Share Price | NAV | MVEINCTG1 | SPTR2 | |
One Year | 69.25% | 68.88% | 71.13% | 30.00% |
Five Year | 0.72% | 0.77% | 0.19% | 16.90% |
Life* | (8.38)% | (8.37)% | (8.14)% | 15.01% |
* | Commencement of Fund: 3/12/12; First Day of Secondary Market Trading: 3/13/12. | |
1 | MVIS North America Energy Infrastructure Index (MVEINCTG) is a rules-based, modified capitalization weighted, float adjusted index intended to give investors a means to track the overall performance of North American companies involved in the midstream energy segment, which includes MLPs and corporations involved in oil and gas storage and transportation. | |
Index data prior to December 2, 2019 reflects that of the Solactive High Income MLP Index (the “MLP Index” or “YMLPTR”), a rules-based index designed to provide investors a means of tracking the performance of selected MLPs which are publicly traded on a U.S. securities exchange. All Index history reflects a blend of the performance of the aforementioned Indexes. | ||
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception)
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 5 for more information.
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VANECK ENERGY INCOME ETF
(unaudited)
The price used to calculate market return (Share Price) is determined by using the closing price listed on its primary listing exchange. Since the shares of the Fund did not trade in the secondary market until after the Fund’s commencement, for the period from commencement to the first day of secondary market trading in shares of the Fund, the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted represents past performance. Past performance is not a guarantee of future results. Investment return and value of the shares of the funds will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.
Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Fund returns reflect reinvestment of dividends and capital gains distributions. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.
The Index Providers do not sponsor, endorse, or promote the Funds and bear no liability with respect to the Funds or any security. Index returns assume the reinvestment of all income and do not reflect any management fees, interest expense, brokerage expenses or income tax benefit/(expense) associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.
Energy Income Index is published by MV Index Solutions GmbH (MVIS®), which is a wholly owned subsidiary of the Adviser, Van Eck Associates Corporation.
MVIS and Solactive are referred to herein as the “Index Providers”.
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VANECK ENERGY INCOME ETF
(unaudited)
Hypothetical $1,000 investment at beginning of period
As a shareholder of a Fund, you incur operating expenses, including management fees and other Fund expenses. This disclosure is intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The disclosure is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, April 1, 2021 to September 30, 2021.
Actual Expenses
The first line in the table below provides information about account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning
Account Value April 1, 2021 |
Ending
Account Value September 30, 2021 |
Annualized
Expense Ratio During Period |
Expenses Paid
During the Period April 1, 2021 - September 30, 2021* |
||||||
Actual | $1,000.00 | $1,154.80 | 0.46% | $2.48 | |||||
Hypothetical** | $1,000.00 | $1,022.76 | 0.46% | $2.33 |
* | Expenses are equal to the Fund’s annualized expense ratio (for the six months ended September 30, 2021), multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year divided by the number of the days in the fiscal year (to reflect the one-half year period). |
** | Assumes annual return of 5% before expenses |
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VANECK ENERGY INCOME ETF
September 30, 2021
Number
of Shares |
Value | |||||||
COMMON STOCKS: 76.7% | ||||||||
Energy: 74.6% | ||||||||
Antero Midstream Corp. | 58,613 | $ | 610,748 | |||||
Cheniere Energy, Inc. * | 15,440 | 1,508,025 | ||||||
CNX Resources Corp. * | 26,752 | 337,610 | ||||||
DT Midstream, Inc. | 17,812 | 823,627 | ||||||
Enbridge, Inc. (USD) | 45,840 | 1,824,432 | ||||||
EnLink Midstream LLC | 42,211 | 287,879 | ||||||
Equitrans Midstream Corp. | 64,896 | 658,045 | ||||||
Gibson Energy, Inc. | 26,981 | 495,482 | ||||||
Inter Pipeline Ltd. | 66,429 | 1,046,312 | ||||||
Keyera Corp. | 38,456 | 967,624 | ||||||
Kinder Morgan, Inc. | 100,737 | 1,685,330 | ||||||
ONEOK, Inc. | 24,323 | 1,410,491 | ||||||
Pembina Pipeline Corp. (USD) | 37,275 | 1,181,245 | ||||||
Plains GP Holdings LP | 35,746 | 385,163 | ||||||
Targa Resources Corp. | 23,521 | 1,157,468 | ||||||
TC Energy Corp. (USD) | 38,068 | 1,830,690 | ||||||
The Williams Companies, Inc. | 60,811 | 1,577,437 | ||||||
17,787,608 | ||||||||
Transportation: 2.1% | ||||||||
Macquarie Infrastructure Holdings LLC | 12,592 | 510,732 | ||||||
Total Common Stocks
(Cost: $16,721,499) |
18,298,340 |
Number
of Shares |
Value | |||||||
MASTER LIMITED PARTNERSHIPS: 23.2% | ||||||||
Energy: 23.2% | ||||||||
Cheniere Energy Partners LP | 3,763 | $ | 153,041 | |||||
Crestwood Equity Partners LP | 5,074 | 144,000 | ||||||
DCP Midstream LP | 7,695 | 217,230 | ||||||
Energy Transfer LP | 110,379 | 1,057,431 | ||||||
Enterprise Products Partners LP | 46,684 | 1,010,242 | ||||||
Magellan Midstream Partners LP | 19,163 | 873,450 | ||||||
MPLX LP | 30,899 | 879,694 | ||||||
NuStar Energy LP | 6,493 | 102,200 | ||||||
Phillips 66 Partners LP | 5,770 | 206,854 | ||||||
Plains All American Pipeline LP | 40,436 | 411,234 | ||||||
Shell Midstream Partners LP (USD) | 11,849 | 139,463 | ||||||
Western Midstream Partners LP | 15,656 | 328,150 | ||||||
Total Master Limited Partnerships
(Cost: $5,593,231) |
5,522,989 | |||||||
Total Investments: 99.9%
(Cost: $22,314,730) |
23,821,329 | |||||||
Other assets less liabilities: 0.1% | 35,262 | |||||||
NET ASSETS: 100.0% | $ | 23,856,591 |
Definitions:
USD | United States Dollar |
Footnotes:
* | Non-income producing |
Summary of Investments by Sector |
% of
Investments |
Value | ||||||||
Energy | 97.9 | % | $ | 23,310,598 | ||||||
Industrials | 2.1 | 510,731 | ||||||||
100.0 | % | $ | 23,821,329 |
The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||
Common Stocks * | $ | 18,298,340 | $ | — | $ | — | $ | 18,298,340 | ||||||||
Master Limited Partnerships * | 5,522,989 | — | — | 5,522,989 | ||||||||||||
Total Investments | $ | 23,821,329 | $ | — | $ | — | $ | 23,821,329 |
* | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
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VANECK ENERGY INCOME ETF
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2021
Assets: | ||||
Investments, at value
Unaffiliated issuers (1) |
$ | 23,821,329 | ||
Receivables: | ||||
Dividends and interest | 37,945 | |||
Federal and State Income Taxes | 63,800 | |||
Total assets | 23,923,074 | |||
Liabilities: | ||||
Payables: | ||||
Due to Adviser | 8,613 | |||
Due to custodian | 57,870 | |||
Total liabilities | 66,483 | |||
NET ASSETS | $ | 23,856,591 | ||
Shares outstanding | 439,720 | |||
Net asset value, redemption and offering price per share | $ | 54.25 | ||
Net Assets consist of: | ||||
Aggregate paid in capital | $ | 44,619,031 | ||
Total distributable earnings (loss) | (20,762,440) | |||
NET ASSETS | $ | 23,856,591 | ||
(1) Cost of investments - Unaffiliated issuers | $ | 22,314,730 |
See Notes to Financial Statements
8 |
|
VANECK ENERGY INCOME ETF
For the Year Ended September 30, 2021
Income: | ||||
Dividends (net of foreign taxes withheld $74,564) | $ | 1,141,109 | ||
Distributions from master limited partnerships | 541,228 | |||
Interest | 35 | |||
Less: return of capital distributions | (972,659) | |||
Total income | 709,713 | |||
Expenses: | ||||
Management fees | 110,883 | |||
Interest | 1,209 | |||
Taxes | 151 | |||
Total expenses | 112,243 | |||
Net investment income | 597,470 | |||
Net realized gain (loss) on: | ||||
Investments | (416,228) | |||
In-kind redemptions | 2,044,086 | |||
Foreign currency transactions and foreign denominated assets and liabilities | 3,717 | |||
Net realized gain | 1,631,575 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 10,387,808 | |||
Foreign currency transactions and foreign denominated assets and liabilities | 156 | |||
Net change in unrealized appreciation (depreciation) | 10,387,964 | |||
Net Increase in Net Assets Resulting from Operations | $ | 12,617,009 |
See Notes to Financial Statements
9 |
|
VANECK ENERGY INCOME ETF
STATEMENT OF CHANGES IN NET ASSETS
Year Ended
September 30, 2021 |
Period Ended
September 30, 2020 (a) |
Year Ended
November 30, 2019 |
||||||||||
Operations: | ||||||||||||
Net investment income (loss) | $ | 597,470 | $ | 485,906 | $ | (271,988) | ||||||
Net realized gain (loss) | 1,631,575 | (1,783,860) | 1,226,721 | |||||||||
Net change in unrealized appreciation (depreciation) | 10,387,964 | (8,835,082) | (2,149,500) | |||||||||
Net increase (decrease) in net assets resulting from operations | 12,617,009 | (10,133,036) | (1,194,767) | |||||||||
Distributions to shareholders from: | ||||||||||||
Distributable earnings | (659,351) | — | (1,204,891) | |||||||||
Return of capital | (850,413) | (1,350,025) | (2,453,758) | |||||||||
Total distributions | (1,509,764) | (1,350,025) | (3,658,649) | |||||||||
Share transactions *: | ||||||||||||
Proceeds from sale of shares | 2,332,086 | 3,706,837 | 18,778,764 | |||||||||
Cost of shares redeemed | (9,804,516) | (23,530,656) | (7,487,335) | |||||||||
Net increase (decrease) in net assets resulting from share transactions | (7,472,430) | (19,823,819) | 11,291,429 | |||||||||
Total increase (decrease) in net assets | 3,634,815 | (31,306,880) | 6,438,013 | |||||||||
Net Assets: | ||||||||||||
Beginning of period | 20,221,776 | 51,528,656 | 45,090,643 | |||||||||
End of period | $ | 23,856,591 | $ | 20,221,776 | $ | 51,528,686 | ||||||
* Shares of Common Stock Issued (no par value): (b) | ||||||||||||
Shares sold | 50,000 | 83,333 | 366,667 | |||||||||
Shares redeemed | (200,000) | (500,000) | (133,333) | |||||||||
Net increase (decrease) | (150,000) | (416,667) | 233,334 |
(a) | The Fund changed is fiscal year-end from November 30 to September 30. |
(b) | Share activity has been adjusted to reflect the 1 for 3 reverse share split which took place on April 15, 2020 (See Note 9). |
See Notes to Financial Statements
10 |
|
VANECK ENERGY INCOME ETF
For a share outstanding throughout each period:
Period | Year Ended November 30, | |||||||||||||||||||||||
Year Ended
September 30, 2021 |
Ended
September 30, 2020(a)(b) |
2019 | 2018 | 2017 | 2016(c) | |||||||||||||||||||
Net asset value, beginning of period | $34.29 | $51.20 | $58.32 | $68.49 | $76.29 | $93.90 | ||||||||||||||||||
Net investment income (loss)(d) | 1.15 | 0.76 | (0.39 | ) | 0.09 | 0.42 | (0.06 | ) | ||||||||||||||||
Net realized and unrealized gain (loss) on investments | 21.90 | (15.58 | ) | (1.42 | ) | (4.44 | ) | (2.25 | ) | (9.93 | ) | |||||||||||||
Total from investment operations | 23.05 | (14.82 | ) | (1.81 | ) | (4.35 | ) | (1.83 | ) | (9.99 | ) | |||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | (1.37 | ) | — | (1.77 | ) | — | — | — | ||||||||||||||||
Return of capital distribution | (1.72 | ) | (2.09 | ) | (3.54 | ) | (5.82 | ) | (5.97 | ) | (7.62 | ) | ||||||||||||
Total distributions | (3.09 | ) | (2.09 | ) | (5.31 | ) | (5.82 | ) | (5.97 | ) | (7.62 | ) | ||||||||||||
Net asset value, end of period | $54.25 | $34.29 | $51.20 | $58.32 | $68.49 | $76.29 | ||||||||||||||||||
Total return(e) | 68.88 | % | (29.74 | )%(f) | (3.66 | )% | (7.16 | )% | (2.67 | )% | (8.40 | )% | ||||||||||||
Ratios to average net assets | ||||||||||||||||||||||||
Expenses | 0.46 | % | 0.45 | %(g)(h) | 1.41 | %(i) | 0.73 | %(j) | 0.86 | %(k) | 0.88 | % | ||||||||||||
Expenses excluding interest expense and taxes | 0.45 | % | 0.45 | %(g)(h) | 1.41 | %(i) | 0.73 | %(j) | 0.86 | %(k) | 0.88 | % | ||||||||||||
Net investment income (loss) | 2.43 | % | 2.17 | %(g)(I) | (0.68 | )%(i) | 0.13 | %(j) | 0.55 | %(k) | (0.34 | )% | ||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of year (in millions) | $24 | $20 | $52 | $45 | $64 | $95 | ||||||||||||||||||
Portfolio turnover rate(m) | 24 | % | 24 | %(f) | 106 | % | 34 | % | 40 | % | 46 | % |
The financial highlights include financial information of the Predecessor Fund through February 21, 2016 (See Note 1).
(a) | On April 15, 2020, the Fund effected a 1 for 3 reverse share split (See Note 9). Per share data prior to April 15, 2020 has been adjusted to reflect the reverse share split. |
(b) | The Fund changed is fiscal year-end from November 30 to September 30. |
(c) | On June 29, 2016, the Fund effected a 1 for 5 reverse share split (See Note 9). Per share data prior to June 29, 2016 has been adjusted to reflect the reverse share split. |
(d) | Calculated based upon average shares outstanding |
(e) | Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions. |
(f) | Not Annualized |
(g) | Annualized |
(h) | Includes income tax expense of 1.56% and adviser reimbursement of (1.56%). If the adviser had not reimbursed the Fund, the ratio would have been higher. |
(i) | Includes income tax expense of 0.59% related to the Fund’s tax status as a C-Corporation prior to its reorganization as a regulated investment company. |
(j) | Includes income tax benefit of 0.11% related to the Fund’s tax status as a C-Corporation prior to its reorganization as a regulated investment company. |
(k) | Includes income tax expense of 0.04% related to the Fund’s tax status as a C-Corporation prior to its reorganization as a regulated investment company. |
(l) | Includes income tax expense of 1.56% and adviser reimbursement of (1.56%). If the adviser had not reimbursed the Fund, the ratio would have been lower. |
(m) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
11 |
|
VANECK ENERGY INCOME ETF
September 30, 2021
Note 1—Fund Organization—VanEck ETF Trust (the “Trust”) (formerly known as VanEck Vectors ETF Trust), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust was incorporated in Delaware as a statutory trust on March 15, 2001. The Trust operates as a series fund, and offers multiple investment portfolios, each of which represents a separate series of the Trust.
The financial statements relate to the Energy Income ETF (the “Fund”). The Fund seeks to provide investment results that correspond generally to the performance, before fees and expenses, of the MVIS® North America Energy Infrastructure Index (the “Index”). The Fund is classified as “non-diversified”. This means that the Fund may invest more of its assets in securities of a single issuer than that of a diversified fund. Van Eck Associates Corporation (the “Adviser”) serves as the investment adviser for the Fund and is subject to the supervision of the Board of Trustees (the “Board”).
Effective February 22, 2016, the shareholders of the Yorkville High Income MLP ETF (the “Predecessor Fund”) approved a proposed agreement and plan of reorganization (the “Reorganization”) that provided for the transfer of all the assets and assumption of certain of the liabilities of the Predecessor Fund, the issuance of shares of the Fund to the shareholders of the Predecessor Fund and the liquidation and termination of the Predecessor Fund. The Predecessor Fund had substantially similar investment objectives, investment strategies, policies and restrictions as those of the Fund. The financial highlights include the financial information of the Predecessor Fund through February 21, 2016.
Effective December 2, 2019, the Fund’s underlying benchmark index changed from the Solactive High Income MLP Index to the MVIS® North American Energy Infrastructure Index, the Fund’s federal tax status changed from a taxable C-corporation into a regulated investment company (“RIC”) and the unitary management fee rate changed from 0.82% to 0.45%.
In September 2020, the Board approved changing the Fund’s fiscal year-end from November 30 to September 30.
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 Fund is an investment company and follows accounting and reporting requirements of Accounting Standards Codification (“ASC”) 946, Financial Services – Investment Companies.
The following summarizes the Fund’s significant accounting policies.
A. | Return of Capital Estimates—Distributions received by the Fund generally are comprised of income and return of capital. The Fund records investment income and return of capital based on estimates made at the time such distributions are received. Such estimates are based on historical information available to the Fund and other industry sources. These estimates may subsequently be revised based on information received from Master Limited Partnerships (“MLPs’’) after the MLP’s tax reporting periods are concluded. |
B. | Master Limited Partnerships— Entities commonly referred to as “MLPs” are generally organized under state law as limited partnerships or limited liability companies. The Fund invests a portion of its total assets in MLPs receiving partnership taxation treatment under the Internal Revenue Code of 1986 (the “Code”), and whose interests or “units” are traded on securities exchanges like shares of corporate stock. To be treated as a partnership for U.S. federal income tax purposes, an MLP must receive at least 90% of its income from qualifying sources such as interest, dividends, real estate rents, gain from the sale or disposition of real property, income and gain from mineral or natural resources activities, income and gains from the transportation or storage of certain fuels, and, in certain circumstances, income and gains from commodities or futures, forwards and options with respect to commodities. The MLPs themselves generally do not pay U.S. federal income taxes (although some states do impose a net income tax on partnerships). Thus, unlike investors in corporate securities, direct MLP investors are generally not |
12 |
|
subject to double taxation (i.e., corporate level tax and tax on corporate dividends). The Fund invests the remainder of its assets in MLPs that are treated as C corporations for tax purposes. | |
C. | Security Valuation— The Fund values its investments in securities and other assets and liabilities at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Securities traded on national exchanges are valued at the closing price on the markets in which the securities trade. Securities traded on the NASDAQ Stock Market LLC (“NASDAQ”) are valued at the NASDAQ official closing price. Over-the-counter securities not included on NASDAQ and listed securities for which no sale was reported are valued at the mean of the bid and ask prices. To the extent these securities are actively traded they are categorized as Level 1 in the fair value hierarchy (described below). Short-term debt securities with sixty days or less to maturity are valued at amortized cost, which with accrued interest approximates fair value. Money market fund investments are valued at net asset value and are categorized as Level 1 in the fair value hierarchy. The Pricing Committee of the Adviser provides oversight of the Fund’s valuation policies and procedures, which are approved by the Fund’s Board of Trustees. Among other things, these procedures allow the Fund 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 Fund’s 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. |
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 Fund may realize upon sale of an investment may differ materially from the value presented in the Schedule of Investments. | |
The Fund utilizes various methods to measure the fair value of its 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 the Fund’s own assumptions in determining the fair value of investments). | |
A summary of the inputs and the levels used to value the Fund’s investments are located in the Schedule of Investments. Additionally, tables that reconcile the valuation of the Fund’s Level 3 investments and that present additional information about the valuation methodologies and unobservable inputs, if applicable, are located in the Schedule of Investments. | |
D. | Federal and Other Income Taxes— Effective December 2, 2019, the Fund changed its investment objective such that it is now the Fund’s policy to comply with the provisions of the Internal Revenue Code |
13 |
|
VANECK ENERGY INCOME ETF
NOTES TO FINANCIAL STATEMENTS
(continued)
applicable to a RIC for current and future tax years. The Fund intends to distribute all of its taxable income to its shareholders. | |
E. | Dividends and Distributions to Shareholders— On a quarterly basis, the Fund distributes substantially all of its dividends and distributions received, less Fund expenses. All distributions are recorded on the ex-dividend date. The estimated characterization of the distributions paid will be either an ordinary income, capital gain or return of capital. Dividends and distributions that exceed earnings and profit for tax purposes are reported as a return of capital. The actual tax characterization of the distributions made during the current year will not be determined until after the end of the fiscal year when the Fund can determine its earnings and profits and, therefore, may differ from the preliminary estimates. |
F. | Currency Translation— Assets and liabilities denominated in foreign currencies and commitments under foreign currency contracts are translated into U.S. dollars at the closing prices of such currencies each business day as quoted by one or more sources. Purchases and sales of investments are translated at the exchange rates prevailing when such investments are acquired or sold. Foreign denominated income and expenses are translated at the exchange rates prevailing when accrued. The portion of realized and unrealized gains and losses on investments that result from fluctuations in foreign currency exchange rates is not separately disclosed in the financial statements. Such amounts are included with the net realized and unrealized gains and losses on investment securities in the Statement of Operations. Recognized gains or losses attributable to foreign currency fluctuations on foreign currency denominated assets, other than investments, and liabilities are recorded as net realized gain (loss) and net change in unrealized appreciation (depreciation) on foreign currency transactions and foreign denominated assets and liabilities in the Statement of Operations. |
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. Interest income, including amortization of premiums and discounts, is accrued as earned. |
The Fund earns interest income on uninvested cash balances held at the custodian bank. Such amounts, if any, are presented as interest income in the Statement of Operations. | |
In the normal course of business, the Fund enters into contracts that contain a variety of general indemnifications. The Fund’s maximum exposure under these agreements is unknown as this would involve future claims that may be made against the Fund 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 Fund. The Adviser receives a management fee, calculated daily and payable monthly based on an annual rate of 0.45% of the Fund’s average daily net assets. The Adviser has agreed to pay all expenses incurred by the Fund except for the advisory fee, acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses.
The Adviser agreed to reimburse the Fund for any differences between the estimated and actual taxes remaining from its prior treatment as a C corporation. These amounts are reflected in the Financial Highlights.
Van Eck Securities Corporation, an affiliate of the Adviser, acts as the Fund’s distributor (the “Distributor”). Certain officers and a Trustee of the Trust are officers, directors or stockholders of the Adviser and Distributor.
Note 4— Capital Share Transactions — As of September 30, 2021, there were an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Fund shares are not individually redeemable and are issued and redeemed at their net asset value per share only through certain authorized broker-dealers (“Authorized Participants”) in blocks of shares (“Creation Units”).
The consideration for the purchase or redemption of Creation Units of the Fund generally consists of the in-kind contribution or distribution of securities constituting the Fund’s underlying index (“Deposit Securities”)
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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 Fund may issue Creation Units in advance of receipt of Deposit Securities subject to various conditions, including, for the benefit of the Fund, 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 Fund may impose variable fees on the purchase or redemption of Creation Units for cash, or on transactions effected outside the clearing process, to defray certain transaction costs. These variable fees, if any, are reflected in share transactions in the Statement of Changes in Net Assets.
Note 5—Investments— For the year ended September 30, 2021, purchases and sales of investments (excluding short-term investments and in-kind capital share transactions) and 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 | ||||||||||||||
Purchases | Sales | Purchases | Sales | |||||||||||
$ | 5,692,534 | $ | 6,077,058 | $ | 2,328,990 | $ | 9,031,878 |
Note 6—Income Taxes— Beginning December 2, 2019, the Fund changed its investment objective such that it is now the Fund’s policy to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies (“RIC”) for future tax years. As a result, the Fund generally will not pay corporate level taxes on its income and capital gains that are distributed to shareholders.
As of September 30, 2021, for Federal income tax purposes, the identified cost, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) of investments were as follows:
Tax Cost of
Investments |
Gross
Unrealized Appreciation |
Gross
Unrealized Depreciation |
Net Unrealized
Appreciation (Depreciation) |
|||||||||||
$ | 20,926,250 | $ | 3,037,181 | $ | (142,102 | ) | $ | 2,895,079 |
At September 30, 2021, the components of total distributable earnings (loss) on a tax basis were as follows:
Undistributed
Ordinary Income |
Accumulated
Capital Losses/ Undistributed Capital Gains |
Other
Temporary Differences |
Unrealized
Appreciation (Depreciation) |
Total
Distributable Earnings (Loss) |
||||||||||||||
$ | – | $ | (22,595,369 | ) | $ | (1,062,402 | ) | $ | 2,895,331 | $ | (20,762,440 | ) |
The tax character of dividends paid to shareholders were as follows:
September 30, 2021 |
September 30,
2020 |
|||||||||||||
Ordinary
Income |
Return
of Capital |
Return
of Capital |
||||||||||||
$ | 659,351 | $ | 850,413 | $ | 1,350,025 |
15 |
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VANECK ENERGY INCOME ETF
NOTES TO FINANCIAL STATEMENTS
(continued)
At September 30, 2021, the Fund had the following capital loss carryforwards available to offset future capital gains:
Year of Expiration |
Short-Term Capital
Losses |
Long-Term Capital
Losses |
Total Capital
Losses |
|||||||||
9/30/2022 | $ | (12,847,636 | ) | $ | - | $ | (12,847,636 | ) | ||||
9/30/2023 | (6,679,603 | ) | - | (6,679,603 | ) | |||||||
9/30/2024 | (1,612,600 | ) | - | (1,612,600 | ) | |||||||
No expiration | (1,084,464 | ) | (371,066) | (1,455,530 | ) | |||||||
Total | $ | (22,224,303 | ) | $ | (371,066) | $ | (22,595,369 | ) |
During the year ended September 30, 2021, $89,478,335 of the Fund’s capital loss carryovers available from prior years expired un-utilized.
During the year ended September 30, 2021, as a result of permanent book to tax differences primarily due to the expiration of capital loss carryovers, treatment of tax gains / losses on in-kind redemptions, and book/tax differences from the Fund’s partnership investments, the Fund incurred differences that affected distributable earnings / (loss) and aggregate paid in capital by the amounts in the table below. Net assets were not affected by these reclassifications.
Increase
(Decrease) in Total Distributable Earnings (Loss) |
Increase
(Decrease) in Aggregate Paid in Capital |
|||||
$ | 87,721,147 | $ | (87,721,147 | ) |
The Fund recognizes 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 Fund’s 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 Fund does 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 Fund’s financial statements.
The Fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the year ended September 30, 2021, the Fund did not incur any interest or penalties.
Note 7—Principal Risks—The Fund’s assets are concentrated in a limited number sectors or industries. By concentrating the Fund’s assets, the Fund is subject to the risk that economic, political or other conditions that have a negative effect on that sector or industry will negatively impact the Fund to a greater extent than if the Fund’s net assets were invested in a wider variety of sectors or industries.
Under normal circumstances, the Fund invests in securities of MLPs, which are subject to certain risks, such as supply and demand risk, depletion and exploration risk, and the risk associated with the hazards inherent in midstream energy industry activities. A portion of the cash flow received by the Fund is derived from investment in equity securities of MLPs. The amount of cash that an MLP has available for distributions and the tax character of such distributions are dependent upon the amount of cash generated by the MLP’s operations.
The respiratory disease caused by a novel coronavirus, which has spread internationally and declared as a pandemic by the World Health Organization, has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, loss of life, as well as general concern and uncertainty. The coronavirus has already negatively impacted the economies of many nations, individual companies, and the market. This pandemic is expected to have a continued impact in ways that cannot necessarily be foreseen presently.
16 |
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A more complete description of risks is included in the 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 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 Fund as directed by the Trustees. The Adviser is responsible for paying the expenses associated with the Plan.
Note 9—Share Split—The Fund executed a 1-for-5 reverse share split for shareholders of record before the open of markets on June 29, 2016. The Fund executed a 1-for-3 reverse share split for shareholders of record before the open of markets on April 15, 2020.
Note 10—Bank Line of Credit—The Fund, along with other funds of the Trust, 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 Fund at the request of the shareholders and other temporary or emergency purposes. The Fund has agreed to pay commitment fees, pro rata, based on the unused but available balance. Interest is charged to the Fund based on prevailing market rates in effect at the time of borrowings. During the year ended September 30, 2021, the Fund borrowed under this Facility:
Days
Outstanding |
Average
Daily Loan Balance |
Average
Interest Rate |
|||||
135 | $ | 127,738 | 1.44 | % |
The outstanding loan balance as of September 30, 2021, if any, is reflected in the Statement of Assets and Liabilities.
Note 11—Subsequent Event Review—The Fund has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.
17 |
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VANECK ENERGY INCOME ETF
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of VanEck Energy Income ETF and the Board of Trustees of VanEck ETF Trust
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of VanEck Energy Income ETF (the “Fund”) (one of the series constituting VanEck ETF Trust (the “Trust”)), including the schedule of investments, as of September 30, 2021, and the related statement of operations for the year ended September 30, 2021, the statements of changes in net assets for the year ended September 30, 2021, the period from December 1, 2019 through September 30, 2020 and for the year end ended November 30, 2019, the financial highlights for the year ended September 30, 2021, for the period from December 1, 2019 through September 30, 2020 and each of the four years in the period ended November 30, 2019 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the series constituting the Trust) at September 30, 2021, and the results of its operations for the year ended September 30, 2021, the changes in its net assets for the year ended September 30, 2021, the period from December 1, 2019 through September 30, 2020 and for the year end ended November 30, 2019 and its financial highlights for the year ended September 30, 2021, for the period from December 1, 2019 through September 30, 2020 and each of the four years in the period ended November 30, 2019, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2021, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from broker were not received. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
We have served as the auditor of one or more of the VanEck investment companies since 1999.
New York, New York
November 19, 2021
18 |
|
VANECK ENERGY INCOME ETF
(unaudited)
The information set forth below relates to distributions paid during the Fund’s current fiscal year as required by federal laws.
Shareholders, however, must report dividends on a calendar year basis for income tax purposes, which may include dividends for portions of two fiscal years of the Fund. Accordingly, the information needed by shareholders for calendar year 2021 income tax purposes will be sent to them in early 2022.
A return of capital is not considered taxable income to shareholders. Pursuant to IRC Section 301(c), the portion of a distribution which is a dividend (as defined under IRC Section 316) is includable in gross income while the portion of the distribution which is not a dividend shall be applied against and reduces the adjusted basis of the stock. Accordingly, shareholders who received these distributions should not include these amounts in taxable income, but instead pursuant to Internal Revenue Code Sections 301(c)(2) and 1016(a) (4), should treat them as a reduction of the cost basis of the applicable shares upon which these distributions were paid. In order to compute the required adjustment to cost basis, a shareholder should multiply the per share amount of each of the respective distributions by the number of shares held at each of the respective record dates.
Please consult your tax advisor for proper treatment of this information.
The following information is provided with respect to the distributions paid during the taxable year ended September 30, 2021:
Payable Date |
Income
Dividends |
Return of
Capital (Non Dividend) Distribution |
Total
Distribution Per Share |
Qualified
Dividend Income for Individuals * |
Dividends
Qualifying for the Dividend Received Deduction for Corporations * |
||||||||||||
11/13/2020 | $ | 0.197130 | $ | 0.459970 | $ | 0.657100 | 100.00 | % | 6.60 | % | |||||||
02/23/2021 | 0.189769 | 0.204531 | 0.394300 | 100.00 | 21.52 | ||||||||||||
05/21/2021 | 0.357928 | 0.385772 | 0.743700 | 100.00 | 21.52 | ||||||||||||
08/20/2021 | 0.624317 | 0.672883 | 1.297200 | 100.00 | 21.52 | ||||||||||||
$ | 1.369144 | $ | 1.723156 | $ | 3.092300 | 100.00 | % | 19.00 | % |
* Expressed as a percentage of the income dividends.
19 |
|
VANECK ENERGY INCOME ETF
BOARD OF TRUSTEES AND OFFICERS
September 30, 2021 (unaudited)
Name, Address1
and Year of Birth |
Position(s)
Held with the Trust |
Term of
Office2 and Length of Time Served |
Principal Occupation(s)
During Past Five Years |
Number of
Portfolios in Fund Complex3 Overseen |
Other Directorships
Held
By Trustee During Past Five Years |
|||||
Independent Trustees | ||||||||||
David H. Chow,
1957*† |
Chairman Trustee |
Since 2008
Since 2006 |
Founder and CEO, DanCourt Management LLC (financial/ strategy consulting firm and Registered Investment Adviser), March 1999 to present. | 60 | Trustee, Berea College of Kentucky, May 2009 to present and currently Chairman of the Investment Committee; Member of the Governing Council of the Independent Directors Council, October 2012 to September 2020; Trustee, MainStay Fund Complex4, January 2016 to present and currently Chairman of the Risk and Compliance Committee. | |||||
Laurie A. Hesslein,
1959*† |
Trustee | Since 2019 | Citigroup, Managing Director, and Business Head, Local Consumer Lending North America, and CEO and President, CitiFinancial Servicing LLC (2013 - 2017). | 60 | Trustee, First Eagle Senior Loan Fund. Formerly, Trustee, Eagle Growth and Income Opportunities Fund, March 2017 to December 2020. | |||||
R. Alastair Short,
1953*† |
Trustee | Since 2006 | President, Apex Capital Corporation (personal investment vehicle). | 72 | Chairman and Independent Director, EULAV Asset Management; Trustee, Kenyon Review; Trustee, Children’s Village. Formerly, Independent Director, Tremont offshore funds. | |||||
Peter J. Sidebottom,
1962*† |
Trustee | Since 2012 | Lead Partner, North America Banking and Capital Markets Strategy, Accenture, May 2017 to present; Partner, PWC/Strategy & Financial Services Advisory, February 2015 to March 2017; Founder and Board Member, AspenWoods Risk Solutions, September 2013 to February 2016; Independent consultant, June 2013 to February 2015; Partner, Bain & Company (management consulting firm), April 2012 to December 2013; Executive Vice President and Senior Operating Committee Member, TD Ameritrade (on-line brokerage firm), February 2009 to January 2012. | 60 | Board Member, Special Olympics, New Jersey, November 2011 to September 2013; Director, The Charlotte Research Institute, December 2000 to 2009; Board Member, Social Capital Institute, University of North Carolina Charlotte, November 2004 to January 2012; Board Member, NJ-CAN, July 2014 to 2016. | |||||
Richard D. Stamberger,
1959*† |
Trustee | Since 2006 | Senior Vice President, B2B, Future Plc (global media company), July 2020 to present; President, CEO and co-founder, SmartBrief, Inc., 1999 to 2019. | 72 | Director, Food and Friends, Inc., 2013 to present. | |||||
Interested Trustee | ||||||||||
Jan F. van Eck,
19635 |
Trustee, Chief Executive Officer and President | Trustee (Since 2006); Chief Executive Officer and President (Since 2009) | Director, President and Chief Executive Officer of Van Eck Associates Corporation (VEAC), Van Eck Absolute Return Advisers Corporation (VEARA) and Van Eck Securities Corporation (VESC); Officer and/or Director of other companies affiliated with VEAC and/or the Trust | 72 | Director, National Committee on US-China Relations. |
1 The address for each Trustee and officer is 666 Third Avenue, 9th Floor, New York, New York 10017.
20 |
|
2 | Each Trustee serves until resignation, death, retirement or removal. Officers are elected yearly by the Trustees. |
3 | The Fund Complex consists of the VanEck Funds, VanEck VIP Trust and the Trust. |
4 | The MainStay Fund Complex consists of MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust and MainStay MacKay Defined Term Municipal Opportunities Fund. |
5 | “Interested person” of the Trust within the meaning of the 1940 Act. Mr. van Eck is an officer of VEAC, VEARA and VESC. |
* | Member of the Audit Committee. |
† | Member of the Nominating and Corporate Governance Committee. |
Officer’s
Name,
Address1 and Year of Birth |
Position(s)
Held with the Trust |
Term
of Office2
And Length of Time Served |
Principal Occupation(s) During Past Five Years | |||
Officer Information | ||||||
Matthew A. Babinsky,
1983 |
Assistant Vice President and Assistant Secretary | Since 2016 | Assistant Vice President, Assistant General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Associate, Clifford Chance US LLP. | |||
Russell G. Brennan,
1964 |
Assistant Vice President and Assistant Treasurer | Since 2008 | Assistant Vice President of VEAC; Officer of other investment companies advised by VEAC and VEARA. | |||
Charles T. Cameron,
1960 |
Vice President | Since 2006 | Portfolio Manager of VEAC; Officer and/or Portfolio Manager of other investment companies advised by VEAC and VEARA. Formerly, Director of Trading of VEAC. | |||
John J. Crimmins,
1957 |
Vice President, Treasurer, Chief Financial Officer and Principal Accounting Officer | Vice President, Chief Financial Officer and Principal Accounting Officer (Since 2012); Treasurer (Since 2009) | Vice President of VEAC and VEARA; Officer of other investment companies advised by VEAC and VEARA. Formerly, Vice President of VESC. | |||
Eduardo Escario,
1975 |
Vice President | Since 2012 | Regional Director, Business Development/Sales for Southern Europe and South America of VEAC. | |||
F. Michael Gozzillo,
1965 |
Chief Compliance Officer | Since 2018 | Vice President and Chief Compliance Officer of VEAC and VEARA; Chief Compliance Officer of VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Chief Compliance Officer of City National Rochdale, LLC and City National Rochdale Funds. | |||
Laura Hamilton,
1977 |
Vice President | Since 2019 | Assistant Vice President of VEAC and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Operations Manager of Royce & Associates. | |||
Nicholas Jackson,
1974 |
Assistant Vice President | Since 2018 | Director, Business Development of VanEck Australia Pty Ltd. Formerly, Vice President, Business Development of VanEck Australia Pty Ltd. | |||
Laura I. Martínez,
1980 |
Vice President and Assistant Secretary | Vice President (Since 2016); Assistant Secretary (Since 2008) | Vice President, Associate General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Assistant Vice President of VEAC, VEARA and VESC. | |||
Matthew McKinnon,
1970 |
Assistant Vice President | Since 2018 | Head of Business Development of Asia Pacific of VanEck Australia Pty Ltd. Formerly, Director, Intermediaries and Institutions of VanEck Australia Pty Ltd. | |||
Arian Neiron,
1979 |
Vice President | Since 2018 | Managing Director and Head of Asia Pacific of VanEck Australia Pty Ltd.; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. | |||
James Parker,
1969 |
Assistant Treasurer | Since 2014 | Assistant Vice President of VEAC; Manager, Portfolio Administration of VEAC and VEARA. Officer of other investment companies advised by VEAC and VEARA. | |||
Adam Phillips,
1970 |
Vice President | Since 2018 | ETF Chief Operating Officer of VEAC; Director of other companies affiliated with VEAC. | |||
Philipp Schlegel,
1974 |
Vice President | Since 2016 | Managing Director of Van Eck Switzerland AG. |
21 |
|
VANECK ENERGY INCOME ETF
BOARD OF TRUSTEES AND OFFICERS (unaudited) (continued)
Jonathan R. Simon,
1974 |
Senior Vice President, Secretary and Chief Legal Officer | Senior Vice President (Since 2016); Secretary and Chief Legal Officer (since 2014) | Senior Vice President, General Counsel and Secretary of VEAC, VEARA and VESC; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. Formerly, Vice President of VEAC, VEARA and VESC. | |||
Andrew Tilzer,
1972 |
Assistant Vice President | Since 2021 | Vice President of Portfolio Administration of VEAC. Formerly, Assistant Vice President, Portfolio Operations of VEAC. |
1 | The address for each Officer is 666 Third Avenue, 9th Floor, New York, New York 10017. |
2 | Officers are elected yearly by the Trustees. |
22 |
|
VANECK ENERGY INCOME ETF
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2021 (unaudited)
At a meeting held on June 17, 2021 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of VanEck® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved the continuation of the investment management agreement between the Trust and Van Eck Associates Corporation (the “Adviser”) (the “Investment Management Agreement”) with respect to the VanEck Energy Income ETF (the “Fund”).
The Board’s approval of the Investment Management Agreement was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.
In preparation for the Renewal Meeting, the Trustees held a meeting on May 7, 2021. At that meeting, the Trustees discussed the information the Adviser and Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party data provider, had provided to them in advance. The information provided to the Trustees included, among other things, information about the performance and expenses of the Fund and the Fund’s peer funds (certain other index-based exchange-traded funds (“ETFs”)), information about the advisory services provided to the Fund and the personnel providing those services, and the profitability (or the absence of profitability) and the benefits enjoyed by the Adviser and its affiliates as a result of the Adviser’s relationship with the Fund. In reviewing performance information for the Fund against its peer group, the Trustees considered that the Fund seeks to track a different index than the funds in its designated peer group and, therefore, the Fund’s performance will differ from its peers. In addition, as noted below, the Trustees reviewed certain performance information for the Fund which was not provided by Broadridge and which did not compare the Fund’s performance to the performance of its peer group. The Trustees noted that the peer group performance information did not necessarily provide meaningful direct comparisons to the Fund.
The Independent Trustees’ consideration of the Investment Management Agreement was based, in part, on their review of information obtained through discussions with the Adviser at the Renewal Meeting and the May 7, 2021 meeting regarding the management of the Fund and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others involved in the management and administration of the Fund. The Trustees also considered the terms of, and scope of services that the Adviser provides, under the Investment Management Agreement, including the Adviser’s agreement to pay all of the direct expenses of the Fund (excluding the fee payment under the Investment Management Agreement, acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses).
The Trustees concluded that the Adviser and its personnel have the requisite expertise and skill to manage the Fund’s portfolio. In evaluating the performance of the Fund, the Trustees reviewed various performance metrics but relied principally on a comparison of the “gross” performance of the Fund (i.e., measured without regard to the impact of fees and expenses) to the performance of its benchmark index. Based on the foregoing, the Trustees concluded that the investment performance of the Fund was satisfactory.
The Trustees also considered information relating to the financial condition of the Adviser and the current status, as they understood it, of the Adviser’s compliance environment.
As noted above, the Trustees were also provided various data from Broadridge comparing the Fund’s expenses and performance to that of certain other ETFs. The Trustees noted that the information provided showed that the Fund had management fees below the average and equal to the median of its peer group of funds. The Trustees also noted that the information provided showed that the Fund had a total expense ratio below the average and equal to the median of its peer group of funds. The Trustees concluded, in light of this information and the other information available to them, that the fees paid by the Fund were reasonable in light of the performance of the Fund and the quality of services received.
The Trustees also considered the benefits, other than fees under the Investment Management Agreement, received by the Adviser from serving as adviser to the Fund.
23 |
|
VANECK ENERGY INCOME ETF
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2021 (unaudited) (continued)
The Trustees also considered information provided by the Adviser about the overall profitability of the Adviser and the fact that the Adviser did not earn any profits from managing the Fund. The Trustees reviewed the Fund’s asset size and expense ratio and noted that the Investment Management Agreement does not include breakpoints in the advisory fee rates as asset levels in the Fund increase. The Trustees considered the volatility of the asset class in which the Fund invests, potential variability in the net assets of the Fund and the sustainability of any potential economies of scale which may exist given where fees are currently set. The Trustees also evaluated the extent to which management fees for the Fund effectively incorporate the benefits of economies of scale. The Trustees also considered the risks being assumed by the Adviser under the unitary fee structure arrangement and the potential expense stability that may inure to the benefit of shareholders. Based on the foregoing and the other information available to them, the Trustees determined that the advisory fee rate for the Fund is reasonable and appropriate in relation to the current asset size of the Fund and the other factors discussed above and that the advisory fee rate for the Fund currently reflects an appropriate sharing with shareholders of any economies of scale which may exist.
The Independent Trustees were advised by and met in executive session with their independent counsel at the Renewal Meeting and at their May 7, 2021 meeting as part of their consideration of the Investment Management Agreement.
In voting to approve the continuation of the Investment Management Agreement, the Trustees, including the Independent Trustees, concluded that the terms of the Investment Management Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded that, at the time of their considerations, the Investment Management Agreement is in the best interest of the Fund and the Fund’s shareholders.
24 |
|
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 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: | VanEck Associates Corporation | |
Distributor: | VanEck Securities Corporation | |
666 Third Avenue, New York, NY 10017 | ||
vaneck.com | ||
Account Assistance: | 800.826.2333 | EINCAR |
|
Item 2. | CODE OF ETHICS. |
(a) | The Registrant has adopted a code of ethics (the “Code of Ethics”) that applies to the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. |
(b) | The Registrant’s code of ethics is reasonably described in this Form N-CSR. |
(c) | The Registrant has not amended its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto. |
(d) | The Registrant has not granted a waiver or an implicit waiver from a provision of its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto. |
(e) | Not applicable. |
(f) | The Registrant’s Code of Ethics is attached as an Exhibit hereto. |
Item 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
The Registrant’s Board of Trustees has determined that David Chow, Laurie A. Hesslein, R. Alastair Short, Peter Sidebottom and Richard Stamberger, members of the Audit Committee, are “audit committee financial experts” and “independent” as such terms are defined in the instructions to Form N-CSR Item 3(a)(2).
Item 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
The principal accountant fees disclosed in Item 4(a), 4(b), 4(c), 4(d) and 4(g) are for the Funds of the Registrant for which the fiscal year end is September 30.
(a) | Audit Fees. The aggregate Audit Fees of Ernst & Young for professional services billed for the audits of the financial statements, or services that are normally provided in connection with statutory and regulatory filings or engagements for the fiscal years ended September 30, 2021 and September 30, 2020, were $414,900 and $390,306 respectively. |
(b) | Audit-Related Fees. Not applicable. |
(c) | Tax Fees. The aggregate Tax Fees of Ernst & Young for professional services billed for the review of Federal, state and excise tax returns and other tax compliance consultations for the fiscal years ended September 30, 2021 and September 30, 2020 were $167,267 and $220,039 respectively. |
(d) | All Other Fees |
None.
(e) | The Audit Committee will pre-approve all audit and non-audit services, to be provided to the Fund, by the independent accountants as required by Section 10A of the Securities Exchange Act of 1934. The Audit Committee has authorized the Chairman of the Audit Committee to approve, between meeting dates, appropriate non-audit services. |
The Audit Committee after considering all factors, including a review of independence issues, will recommend to the Board of Trustees the independent auditors to be selected to audit the financial statements of the Funds. |
|
(f) | Not applicable. |
(g) | Not applicable. |
(h) | Not applicable. |
Item 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
The Registrant’s Board has an Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)) consisting of five Independent Trustees. Messrs. Chow, Hesslein, Short, Sidebottom and Stamberger currently serve as members of the Audit Committee. Mr. Short is the Chairman of the Audit Committee.
Item 6. | SCHEDULE OF INVESTMENTS. |
Information included in Item 1.
Item 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
Item 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
Item 9. | PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
Item 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
None.
Item 11. | CONTROLS AND PROCEDURES. |
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3 (c)) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15 (b)). |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a(d)) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. | DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT COMPANIES. |
Not applicable.
Item 13. | EXHIBITS. |
(a)(1) | The code of ethics is attached as EX-99.CODE ETH |
(b) | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is furnished as Exhibit 99.906CERT. |
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) VANECK ETF TRUST
By | (Signature and Title) | /s/ John J. Crimmins, Treasurer and CFO | |
Date | December 7, 2021 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By | (Signature and Title) | /s/ Jan F. van Eck, CEO | |
Date | December 7, 2021 | |
By | (Signature and Title) | /s/ John J. Crimmins, Treasurer and CFO | |
Date | December 7, 2021 |
EX-99.CODE ETH
VANECK VIP TRUST
VANECK FUNDS
VANECK ETF TRUST
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
I. | COVERED OFFICERS/PURPOSE OF THE CODE |
VanEck’s Code of Ethics (this “Code”) for the investment companies within the complex (collectively, “Funds” and each, “Company”) applies to the Company’s Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer (the “Covered Officers” each of whom are set forth in Exhibit A) for the purpose of promoting:
o | honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
o | full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Company; |
o | compliance with applicable laws and governmental rules and regulations; |
o | the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and |
o | accountability for adherence to the Code. |
Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.
II. | COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF INTEREST |
OVERVIEW. A “conflict of interest” occurs when a Covered Officer’s private interest interferes with the interests of, or his service to, the Company. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Company.
Certain conflicts of interest arise out of the relationships between Covered Officers and the Company and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (“Investment Company Act”) and the Investment Advisers Act of 1940 (“Investment Advisers Act”). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Company because of their status as “affiliated persons” of the Company. The Company’s and the investment adviser’s compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.
|
Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Company and the investment adviser of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Company or for the adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the adviser and the Company. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Company and the adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Company. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds’ Boards of Directors (“Boards”) that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.
Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Company.
Each Covered Officer must:
o | not use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Company whereby the Covered Officer would benefit personally to the detriment of the Company; |
o | not cause the Company to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the Company; |
o | not use material non-public knowledge of portfolio transactions made or contemplated for the Company to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; |
There are some conflict of interest situations that should always be discussed with the Compliance Officer if material. Examples of these include:
o | service as a director on the board of any public or private company; |
o | the receipt of any non-nominal gifts; |
o | the receipt of any entertainment from any company with which the Company has current or prospective business dealings unless such entertainment is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety. |
o | any ownership interest in, or any consulting or employment relationship with, any of the Company’s service providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof, |
|
o | a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Company for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s employment, such as compensation or equity ownership. |
III. | DISCLOSURE AND COMPLIANCE |
o | Each Covered Officer should familiarize himself with the disclosure requirements generally applicable to the Company; |
o | Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company’s directors and auditors, and to governmental regulators and self-regulatory organizations; |
o | Each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Funds and the adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and |
o | It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. |
IV. | REPORTING AND ACCOUNTABILITY |
Each Covered Officer must:
o | report at least annually all affiliations or other relationships related to conflicts of interest that the Company’s Directors and Officers Questionnaire covers; |
o | upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that he has received, read, and understands the Code; |
o | annually thereafter affirm to the Board that he has complied with the requirements of the Code; |
o | not retaliate against any other Covered Officer or any employee of the Funds or their affiliated persons for reports of potential violations that are made in good faith, and |
o | notify the Compliance Officer promptly if he knows of any violation of this Code. Failure to do so is itself a violation of this Code. |
The Compliance Officer or other designated senior legal officer of the Funds’ investment adviser is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, any approvals or waivers sought by the Principal Executive Officer will be considered by the Governance Committee.
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The Company will follow these procedures in investigating and enforcing this Code:
o | the Compliance Officer or other designated senior legal officer will take all appropriate action to investigate any potential violations reported to him; |
o | if, after such investigation, the Compliance Officer believes that no violation has occurred, the Compliance Officer is not required to take any further action; |
o | any matter that the Compliance Officer believes is a violation will be reported to the Committee; |
o | if the Committee concurs that a violation has occurred, it will inform the Board, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer; |
o | the Committee will be responsible for granting waivers, as appropriate; and any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. |
V. | OTHER POLICIES AND PROCEDURES |
This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, the Funds’ adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Funds’ and their investment adviser’s and principal underwriter’s codes of ethics under Rule 17j-1 under the Investment Company Act and the adviser’s more detailed policies and procedures set forth in the Van Eck Employee Manual are separate requirements applying to the Covered Officers and others, and are not part of this Code.
VI. | AMENDMENTS |
Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board.
VII. | CONFIDENTIALITY |
All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the appropriate Board and its counsel.
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VIII. | INTERNAL USE |
The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Company, as to any fact, circumstance, or legal conclusion.
EXHIBIT A
COVERED OFFICERS
Jan F. van Eck, Chief Executive Officer, VanEck Funds, VanEck VIP Trust and VanEck ETF Trust
John J. Crimmins, Treasurer & Chief Financial Officer, VanEck Funds, VanEck VIP Trust and VanEck ETF Trust
Exhibit 99.CERT
CERTIFICATIONS
I, Jan F. van Eck, Chief Executive Officer, certify that:
1. I have reviewed this report on Form N-CSR of VanEck ETF Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and changes in net assets, of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s Board of Trustees (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: | December 7, 2021 | |
/s/ Jan F. van Eck | ||
Jan F. van Eck | ||
Chief Executive Officer |
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I, John J. Crimmins, Treasurer and Chief Financial Officer, certify that:
1. I have reviewed this report on Form N-CSR of VanEck ETF Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and changes in net assets, of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s Board of Trustees (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: | December 7, 2021 | |
/s/ John J. Crimmins | ||
John J. Crimmins | ||
Treasurer & Chief Financial Officer |
EX99-906CERT
CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of VanEck ETF Trust (comprising of Biotech ETF, Digital Transformation ETF, Energy Income ETF, Environmental Services ETF, Gaming ETF, Inflation Allocation ETF, Morningstar Durable Dividend ETF, Long/Flat Trend ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF, Morningstar Wide Moat ETF, Pharmaceutical ETF, Retail ETF, Semiconductor ETF, Social Sentiment ETF and Video Gaming and eSports ETF), do hereby certify, to such officer’s knowledge, that:
The annual report on Form N-CSR of VanEck Vectors ETF Trust for the period ending September 30, 2021 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of VanEck Vectors ETF Trust.
Dated: December 7, 2021 | /s/ Jan F. van Eck |
Jan F. van Eck | |
Chief Executive Officer | |
VanEck ETF Trust | |
Dated: December 7, 2021 | /s/ John J. Crimmins |
John J. Crimmins | |
Treasurer & Chief Financial Officer | |
VanEck ETF Trust |
This certification is being furnished solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Report or as a separate disclosure document.