UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM N-CSR

              CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

                              INVESTMENT COMPANIES

Investment Company Act file number  811-10325

                            VANECK VECTORS ETF TRUST
               (Exact name of registrant as specified in charter)

                      666 Third Avenue, New York, NY 10017
               (Address of principal executive offices) (Zip code)

                         Van Eck Associates Corporation
                      666 Third Avenue, New York, NY 10017
                     (Name and address of agent for service)

Registrant's telephone number, including area code: (212) 293-2000

Date of fiscal year end:  SEPTEMBER 30

Date of reporting period: MARCH 31, 2018

ITEM 1. REPORT TO SHAREHOLDERS

SEMI-ANNUAL REPORT March 31, 2018 (unaudited)

 

VANECK VECTORS®
Biotech ETF	BBH
Environmental Services ETF	EVX®
Gaming ETF	BJK®
Generic Drugs ETF	GNRX
Pharmaceutical ETF	PPH®
Retail ETF	RTH®
Semiconductor ETF	SMH®

 

	800.826.2333	vaneck.com

 

 

President’s Letter	1
Management Discussion	3
Biotech ETF	3
Environmental Services ETF	3
Gaming ETF	4
Generic Drugs ETF	4
Pharmaceutical ETF	4
Retail ETF	4
Semiconductor ETF	5
Explanation of Expenses	6
Schedule of Investments
Biotech ETF	7
Environmental Services ETF	9
Gaming ETF	11
Generic Drugs ETF	13
Pharmaceutical ETF	15
Retail ETF	17
Semiconductor ETF	18
Statements of Assets and Liabilities
Biotech ETF	20
Environmental Services ETF	20
Gaming ETF	20
Generic Drugs ETF	20
Pharmaceutical ETF	21
Retail ETF	21
Semiconductor ETF	21
Statements of Operations
Biotech ETF	22
Environmental Services ETF	22
Gaming ETF	22
Generic Drugs ETF	22
Pharmaceutical ETF	23
Retail ETF	23
Semiconductor ETF	23
Statements of Changes in Net Assets
Biotech ETF	24
Environmental Services ETF	24
Gaming ETF	25
Generic Drugs ETF	25
Pharmaceutical ETF	25
Retail ETF	26
Semiconductor ETF	26
Financial Highlights
Biotech ETF	27
Environmental Services ETF	27
Gaming ETF	28
Generic Drugs ETF	28
Pharmaceutical ETF	29
Retail ETF	29
Semiconductor ETF	30
Notes to Financial Statements	31

 

 

The information contained in the management discussion represents the opinions of VanEck Vectors ETFs and may differ from other persons. This information is not intended to be a forecast of future events, a guarantee of future results or investment advice. 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 and the Funds’ performance, and the views of VanEck Vectors ETFs are as of March 31, 2018, and are subject to change.

VANECK VECTORS ETFs

March 31, 2018 (unaudited)

 

Dear Shareholder:

 

We are pleased to present this semi-annual report for the seven industry exchange-traded funds (ETFs) of the VanEck Vectors^® ETF Trust for the six-month period ended March 31, 2018.

 

One of the two top performing funds in our suite of industry ETFs was the VanEck Vectors Semiconductor ETF (NYSE Arca: SMH) which returned 13.36% for the period under review.

 

The semiconductor industry ended 2017 on a high: global sales for 2017 of $412.2 billion were 21.6% higher than those in 2016. In addition, sales for December 2017 ($38.0 billion) and the fourth quarter 2017 ($114.0 billion) were the highest monthly and quarterly sales respectively ever recorded.¹ According to John Neuffer, president and CEO of the Semiconductor Industry Association, “[a]s semiconductors have become more heavily embedded in an ever-increasing number of products—from cars to coffee makers—and nascent technologies like artificial intelligence, virtual reality, and the Internet of Things have emerged, global demand for semiconductors has increased, leading to landmark sales in 2017 and a bright outlook for the long term.”²

 

The industry started 2018 on a solid footing. In January, sales were up 22.7% compared to January 2017 and the market grew year over year for the eighteenth consecutive month.³ Sales in February were also solid, up 21% compared to February 2017. Fourth quarter earnings from several of the large chipmakers, reported in the first quarter of 2017,⁴ were particularly solid, with the vast majority of reporting companies in SMH portfolio beating earnings expectations.

 

Semiconductors – Worldwide Market Billings: 3-Month Moving Averages ($bn)

 

 

Source: Semiconductor Industry Association. Data as of January 31, 2018. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue. Past performance is no guarantee of future results; current performance may be lower or higher than the performance data quoted.

 

Access investment and market insights from VanEck’s investment professionals by subscribing to our blogs. To subscribe to the updates, please contact us at 800.826.2333 or visit vaneck.com/subscription to register.

VANECK VECTORS ETFs

(unaudited) (continued)

 

Thank you for participating in the VanEck Vectors ETF Trust. On the following pages, you will find the performance record of each of the funds for the six months ended March 31, 2018. You will also find their financial statements. We value your continuing confidence in us and look forward to helping you meet your investment goals in future.

 

 

Jan F. van Eck

Trustee and President

VanEck Vectors ETF Trust

 

April 16, 2018

 

Represents the opinions of the investment adviser. Past performance is no guarantee of future results. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue.

 

1	Semiconductor Industry Association: Annual Semiconductor Sales Increase 21.6 Percent, Top $400 Billion for First Time, https://www.semiconductors.org/news/2018/02/05/global_sales_report_2017/annual_semiconductor_sales_increase_21.6_percent_top_ 400_billion_for_first_time/
2	Ibid.
3	Semiconductor Industry Association: January Semiconductor Sales Up 22.7 Percent Compared to Last Year, https://www.semiconductors.org/news/2018/03/05/global_sales_report_2017/january_semiconductor_sales_up_22.7_percent_compared_ to_last_year/
4	Semiconductor Industry Association: Global Semiconductor Sales Up 21 Percent Year-to-Year in February, https://www.semiconductors.org/news/2018/04/02/global_sales_report_2017/global_semiconductor_sales_up_21_percent_year_to_year_ in_february/

 

 

Management Discussion (unaudited)

 

Four of the seven VanEck Vectors Industry ETFs realized positive performance in the six months ended March 31, 2018. The two best performers were VanEck Vectors Retail ETF (NYSE Arca: RTH), posting a total return of 16.26%, and VanEck Vectors Semiconductor ETF (NYSE Arca: SMH), in second place, providing a total return of 13.36%.

 

 

 

Source: VanEck. Returns based on NAV. The performance data quoted represent past performance. Past performance is not a guarantee of future results. Performance information for the Funds reflects temporary waivers of expenses and/or fees. Had the Funds incurred all expenses, investment returns would have been reduced. Investment return and value of the shares of the Funds will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted.

 

Biotech – Not helped by State of the Union address

 

Biotech stocks failed to perform well over the six-month period. Following highs through mid-October, biotech stocks subsequently fell over the next three months to end 2017 down on the quarter. Despite some recovery through the end of January, stocks were not helped by President Trump’s mention of “fixing the injustice” of the high prices of U.S. drugs in his State of the Union address,¹ nor the announcement of a prospective joint health care venture between Amazon.com, Berkshire Hathaway, and JPMorgan Chase & Co.² The selloff at the end of the month and into the first week of February saw biotech stocks plummet. The recovery thereafter through the end of the reporting period on March 31, 2018 was minimal.

 

Positive contributions to the Fund’s performance came mainly from three companies: Illumina, Neurocrine Biosciences, and Vertex Pharmaceuticals (4.6%, 2.0%, and 5.0% of Fund net assets respectively^†). The companies that detracted most from performance were Celgene, Incyte, and Regeneron Pharmaceuticals (7.3%, 4.2%, and 4.8% of Fund net assets, respectively^†).

 

Environmental Services – No lasting benefit in 2018 from 2017 hurricanes

 

Following the steep improvement in their performance in both August and September 2017 (on the back of the three hurricanes that had hit the U.S. and its territories in the Caribbean), environmental services stocks essentially moved sideways thereafter, with a number of ups and downs, ending the six-month period under review down slightly.

 

While large- and small-cap stocks provided positive total returns, their contribution was outweighed by the negative total returns of the Fund’s mid-cap companies. Waste Management (10.0% of Fund net assets^†), Cantel Medical (3.9% of Fund net assets^†), and STERIS (10.2% of Fund net assets^†) were the top three contributors to positive total returns. CECO Environmental (1.9% of Fund net assets^†), Stericycle (3.8% of Fund net assets^†), and ABM Industries (3.9% of Fund net assets^†) detracted the most from performance.

VANECK VECTORS ETFs

(unaudited) (continued)

 

Gaming – Macau powers ahead

 

The Fund posted a rise of 10.89% for the six-month period. The fourth quarter of 2017 was strong with gaming stocks on an upward trajectory through the end of the year. In Macau, China—the world’s biggest gaming hub—the improvement in the gaming industry’s fortunes over the final three months of 2017 was impressive. In each of these months the gross revenue from “Games of Fortune” (as the Macau authorities³ describe them) was higher than that recorded in the same month in the prior year. In October, November, and December 2017, they were 22.1%, 22.6%, and 14.6%, respectively, higher than in the same months in 2016.⁴ 2018 started strongly, with revenues in January, February, and March up 36.4%, 5.7%, and 22.2%, respectively, over 2017.⁵ In Nevada, the narrative for the last quarter of 2017 and the start of 2018 was not as rosy. While the “gaming wins” in both October and December may have increased incrementally year over year, the “gaming win” for November decreased 2.3% compared with that in November 2016.⁶ While February 2018’s win may have been 7.68% up on that of February 2017, January’s was 2.05% down on that of January 2017.⁷

 

U.S. listed companies were the leading contributors to performance, followed by those listed in China (Hong Kong). The other major contributors were companies in Australia and the U.K. Only Swedish gaming businesses detracted from the Fund’s overall positive performance.

 

Generic Drugs – Still a tough, but positive, environment

 

The Fund had a good six months, ending the period up 10.78%. Following steady gains through the fourth quarter 2017, generic drugs stocks (perhaps somewhat surprisingly) also faced a significant sell-off in early February 2018 from which they failed to recover fully by the end of the six-month reporting period. But they still remained up over the full period under review.

 

The biotechnology and pharmaceuticals sectors contributed the most to the Fund’s performance. The majority of negative performance was provided by the chemicals sector. In terms of individual companies, South Korean company Celltrion (8.0% of Fund net assets^†) was the single largest contributor to performance. U.S. company Albemarle (3.0% of Fund net assets^†) was the single largest detractor from performance.

 

Pharmaceutical – Not helped by State of the Union address

 

Pharmaceutical stocks had a lackluster six months. However, unlike biotech stocks, they ended the period down only 1.24%. Having hit a high for the period toward the end of January, pharma stocks plummeted in the selloff thereafter, hitting a low in early-February and slumping thereafter further, if fitfully, through to the end of March. Along with biotech stocks, they, too, were not helped by the mention of drugs prices in President Trump’s State of the Union address.

 

While Mylan and Zoetis (4.4% and 4.7% of Fund net assets, respectively^†) were the two largest positive contributors to performance, Mallinckrodt and Sanofi (0.7% and 5.1% of Fund net assets, respectively^†) were the Fund’s two largest detractors.

 

Retail – eCommerce remains solid

 

The Fund returned a very healthy 16.26% for the six-month period under review. Retail sales (excluding automobiles, gasoline stations, and restaurants) in the U.S. over the last three months of 2017 proved to be robust. Following retail sales up 4.3% in October,⁸ in November and December, sales increased 5.5% over 2016 to reach $691.9 billion.⁹ This included some $138.4 billion in online and other non-store sales, up 11.5% over 2016.¹⁰ These sales results beat the National Retail Federation forecast of approximately between $678 billion and $682 billion. The 5.5% was the largest increase since that of 5.2% seen in 2010.¹¹ 2018 started strongly with retail sales (excluding automobiles, gasoline stations, and restaurants) in January, up 5.4% on 2017.¹² Although growth in February was a little slower, 4.4% year over year and 0.3% (seasonally adjusted) up in January,¹³ according to National Retail Federation Chief Economist Jack Kleinhenz: “With consumer confidence and employment growing, economic fundamentals are favorable for spending to expand in the coming months.”¹⁴

 

While stores involved in Internet and catalog retailing, in particular Amazon.com (19.3% of Fund net assets^†), contributed by far the most to the positive performance of the Fund, both specialty and multiline retailers also made useful contributions to performance. Health care providers and services companies detracted from performance.

 

 

Semiconductor – Industry sales continue to boom

 

The Fund returned 13.36% for the six-month period under review. Global sales for 2017 of $412.2 billion were 21.6% higher than those in 2016. In addition, sales for December 2017 ($38.0 billion) and the fourth quarter 2017 ($114.0 billion) were the highest monthly and quarterly sales respectively ever recorded.¹⁵ Thereafter semiconductor sales in the first two months of 2018 also remained strong. In January, sales were up 22.7% compared to January 2017 and the market grew year over year for the eighteenth consecutive month.¹⁶ While in February, sales growth was a little down from January, they were still up 21% compared to February 2017.¹⁷

 

Large-capitalization stocks continued to be key drivers of SMH’s returns. Intel, Taiwan Semiconductor Manufacturing, and NVIDIA (8.1%, 7.8% and 5.1% of Fund net assets, respectively^†) were the three best performing companies. Advanced Micro Devices, Cadence Design, and Broadcom (2.4%, 2.2%, and 5.0% of Fund net assets, respectively^†) detracted most from the Fund’s performance.

 

†	All Fund assets referenced are Total Net Assets as of March 31, 2018.
1	CNN Money: Trump wants to fix ‘injustice’ of high drug prices. But can he?, http://money.cnn.com/2018/01/31/investing/trump-state-of-the-union-drug-prices/index.html
2	U.S. News: Health Stocks Pressured Under JPM-AMZN-BRK Venture, https://money.usnews.com/investing/stock-market-news/articles/2018-01-31/health-care-stocks-jpm-amzn-brk
3	Gaming Inspection and Coordination Bureau, Macao SAR: Monthly Gross Revenue from Games of Fortune, http://www.dicj.gov.mo/web/en/information/DadosEstat_mensal/2017/index.html
4	Ibid.
5	Gaming Inspection and Coordination Bureau, Macao SAR: Monthly Gross Revenue from Games of Fortune, http://www.dicj.gov.mo/web/en/information/DadosEstat_mensal/2018/index.html
6	Nevada Gaming Control Board: Abbreviated Revenue Release, http://gaming.nv.gov/index.aspx?page=172
7	Ibid.
8	National Retail Federation: October Retail Sales Up 4.3 Percent Over Last Year, https://nrf.com/media/press-releases/october-retail-sales-43-percent-over-last-year
9	National Retail Federation: Holiday Retail Sales Increased 5.5 Percent in 2017, Exceeding NRF Forecasts and Showing Strongest Gain Since Great Recession, https://nrf.com/media/press-releases/holiday-retail-sales-increased-55-percent-2017-exceeding-nrf-forecast-and
10	Ibid.
11	Ibid.
12	National Retail Federation: January Retail Sales Continue Strong After Holidays, Up 5.4 Percent Over Last Year, https://nrf.com/media/press-releases/january-retail-sales-continue-strong-after-holidays-54-percent-over-last-year
13	National Retail Federation: February Retail Sales Increase 4.4 Percent Over Last Year, https://nrf.com/media/press-releases/february-retail-sales-increase-44-percent-over-last-year
14	Ibid.
15	Semiconductor Industry Association: Annual Semiconductor Sales Increase 21.6 Percent, Top $400 Billion for First Time, https://www.semiconductors.org/news/2018/02/05/global_sales_report_2017/annual_semiconductor_sales_increase_21.6_percent_top_40 0_billion_for_first_time/
16	Semiconductor Industry Association: January Semiconductor Sales Up 22.7 Percent Compared to Last Year, https://www.semiconductors.org/news/2018/03/05/global_sales_report_2017/january_semiconductor_sales_up_22.7_percent_compared_ to_last_year/
17	Semiconductor Industry Association: Global Semiconductor Sales Up 21 Percent Year-to-Year in February, https://www.semiconductors.org/news/2018/04/02/global_sales_report_2017/global_semiconductor_sales_up_21_percent_year_to_year_in _february/

VANECK VECTORS ETF TRUST

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, October 1, 2017 to March 31, 2018.

 

Actual Expenses

The first line in the table below provides information about account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”

 

Hypothetical Example for Comparison Purposes

The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

		Beginning Account Value October 1, 2017				Ending Account Value March 31, 2018				Annualized Expense Ratio During Period				Expenses Paid During the Period* October 1, 2017 - March 31, 2018
Biotech ETF
Actual		$	1,000.00			$	901.40				0.35	%			$1.66
Hypothetical**		$	1,000.00			$	1,023.19				0.35	%			$1.77
Environmental Services ETF
Actual		$	1,000.00			$	995.50				0.56	%			$2.79
Hypothetical**		$	1,000.00			$	1,022.14				0.56	%			$2.82
Gaming ETF
Actual		$	1,000.00			$	1,108.90				0.65	%			$3.42
Hypothetical**		$	1,000.00			$	1,021.69				0.65	%			$3.28
Generic Drugs ETF
Actual		$	1,000.00			$	1,107.80				0.55	%			$2.89
Hypothetical**		$	1,000.00			$	1,022.19				0.55	%			$2.77
Pharmaceutical ETF
Actual		$	1,000.00			$	987.60				0.36	%			$1.78
Hypothetical**		$	1,000.00			$	1,023.14				0.36	%			$1.82
Retail ETF
Actual		$	1,000.00			$	1,162.60				0.35	%			$1.89
Hypothetical**		$	1,000.00			$	1,023.19				0.35	%			$1.77
Semiconductor ETF
Actual		$	1,000.00			$	1,133.60				0.35	%			$1.86
Hypothetical**		$	1,000.00			$	1,023.19				0.35	%			$1.77

 

*	Expenses are equal to the Fund’s annualized expense ratio (for the six months ended March 31, 2018) multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year divided by the number of days in the fiscal year (to reflect the one-half year period).
**	Assumes annual return of 5% before expenses

VANECK VECTORS BIOTECH ETF

SCHEDULE OF INVESTMENTS

March 31, 2018 (unaudited)

 

 

Definitions:
ADR	American Depositary Receipt
USD	United States Dollar
Footnotes:
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $1,465,812.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned		% of Investments				Value
Biotechnology			61.5	%		$	270,280,804
Health Care			29.2				128,015,961
Life Sciences Tools & Services			9.2				40,476,770
Money Market Fund			0.1				379,960
			100.0	%		$	439,153,495

 

See Notes to Financial Statements

VANECK VECTORS BIOTECH ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

The summary of inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Common Stocks*		$	438,773,535			$	—				$	—			$	438,773,535
Money Market Fund			379,960				—					—				379,960
Repurchase Agreements			—				1,542,625					—				1,542,625
Total		$	439,153,495			$	1,542,625				$	—			$	440,696,120

 

* See Schedule of Investments for geographic sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2018.

 

See Notes to Financial Statements

VANECK VECTORS ENVIRONMENTAL SERVICES ETF

SCHEDULE OF INVESTMENTS

March 31, 2018 (unaudited)

 

 

Definitions:
USD	United States Dollar
Footnotes:
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $1,680,079.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned		% of Investments				Value
Consumer Discretionary			3.9	%		$	835,341
Consumer Staples			3.9				818,255
Energy			1.9				403,801
Health Care			14.0				2,983,824
Industrials			74.2				15,767,618
Materials			1.9				407,934
Money Market Fund			0.2				52,946
			100.0	%		$	21,269,719

 

See Notes to Financial Statements

VANECK VECTORS ENVIRONMENTAL SERVICES ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

The summary of inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Common Stocks*		$	21,216,773			$	—				$	—			$	21,216,773
Money Market Fund			52,946				—					—				52,946
Repurchase Agreements			—				1,704,843					—				1,704,843
Total		$	21,269,719			$	1,704,843				$	—			$	22,974,562

 

* See Schedule of Investments for geographic sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2018.

 

See Notes to Financial Statements

VANECK VECTORS GAMING ETF

SCHEDULE OF INVESTMENTS

March 31, 2018 (unaudited)

 

 

See Notes to Financial Statements

VANECK VECTORS GAMING ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

Definitions:

ADR	American Depositary Receipt
LDR	Local Depositary Receipt
USD	United States Dollar

Footnotes:

*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $2,144,566.
#	Indicates a fair valued security which has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $30,168,648 which represents 56.8% of net assets.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned		% of Investments				Value
Consumer Discretionary			95.6	%		$	50,778,212
Information Technology			1.7				890,756
Real Estate			2.7				1,446,105
			100.0	%		$	53,115,073

 

The summary of inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

						Level 2				Level 3
		Level 1				Significant				Significant
		Quoted				Observable				Unobservable
		Prices				Inputs				Inputs					Value
Common Stocks
Australia		$	—			$	6,608,988				$	—			$	6,608,988
Cambodia			—				543,372					—				543,372
Canada			713,297				—					—				713,297
China / Hong Kong			2,144,897				11,981,124					—				14,126,021
Greece			—				751,729					—				751,729
Ireland			1,902,163				—					—				1,902,163
Japan			—				1,780,285					—				1,780,285
Malaysia			—				1,113,626					—				1,113,626
Malta			—				618,520					—				618,520
New Zealand			—				385,658					—				385,658
Singapore			—				1,441,457					—				1,441,457
South Africa			—				359,713					—				359,713
South Korea			—				1,076,564					—				1,076,564
Sweden			—				493,126					—				493,126
United Kingdom			—				3,014,486					—				3,014,486
United States			16,739,963				—					—				16,739,963
Real Estate Investment Trusts*			1,446,105				—					—				1,446,105
Repurchase Agreements			—				2,239,962					—				2,239,962
Total		$	22,946,425			$	32,408,610				$	—			$	55,355,035

 

* See Schedule of Investments for geographic sector breakouts.

 

During the period ended March 31, 2018, transfers of securities from Level 1 to Level 2 were $4,313,953. These transfers resulted primarily from changes in certain foreign securities valuation methodologies between the last close of the securities’ primary market (Level 1) and valuation by a pricing service (Level 2), which takes into account market direction or events occurring before the Fund’s pricing time but after the last local close, as described in the Notes to Financial Statements

See Notes to Financial Statements

VANECK VECTORS GENERIC DRUGS ETF

SCHEDULE OF INVESTMENTS

March 31, 2018 (unaudited)

 

 

See Notes to Financial Statements

VANECK VECTORS GENERIC DRUGS ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

Definitions:

ADR	American Depositary Receipt
GBP	British Pound
USD	United States Dollar

Footnotes:

*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $170,906.
#	Indicates a fair valued security which has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $2,239,241 which represents 61.1% of net assets.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned		% of Investments				Value
Biotechnology			12.6	%		$	466,133
Health Care Distributors			2.4				90,205
Life Sciences Tools & Services			16.6				618,017
Pharmaceuticals			64.3				2,388,357
Specialty Chemicals			2.9				108,506
Money Market Fund			1.2				44,394
			100.0	%		$	3,715,612

 

The summary of inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Common Stocks
Belgium		$	—			$	167,437				$	—			$	167,437
China / Hong Kong			64,095				416,824					—				480,919
Finland			—				33,719					—				33,719
Germany			67,788				—					—				67,788
Hungary			—				41,191					—				41,191
India			57,338				528,876					—				586,214
Indonesia			—				54,188					—				54,188
Ireland			287,503				—					—				287,503
Israel			225,686				—					—				225,686
Japan			—				308,807					—				308,807
Jordan			—				43,293					—				43,293
South Africa			—				105,845					—				105,845
South Korea			—				353,530					—				353,530
Switzerland			—				185,531					—				185,531
United States			729,567				—					—				729,567
Money Market Fund			44,394				—					—				44,394
Repurchase Agreement			—				170,345					—				170,345
Total		$	1,476,371			$	2,409,586				$	—			$	3,885,957

 

During the period ended March 31, 2018, transfers of securities from Level 1 to Level 2 were $154,390, and transfers of securities from Level 2 to Level 1 were $53,386. These transfers resulted primarily from changes in certain foreign securities valuation methodologies between the last close of the securities’ primary market (Level 1) and valuation by a pricing service (Level 2), which takes into account market direction or events occurring before the Fund’s pricing time but after the last local close, as described in the Notes to Financial Statements.

 

See Notes to Financial Statements 

VANECK VECTORS PHARMACEUTICAL ETF

SCHEDULE OF INVESTMENTS

March 31, 2018 (unaudited)

 

 

See Notes to Financial Statements

VANECK VECTORS PHARMACEUTICAL ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

Definitions:

ADR	American Depositary Receipt
USD	United States Dollar

Footnotes:

*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $28,238,597.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned		% of Investments				Value
Health Care			24.9	%		$	61,099,672
Pharmaceuticals			75.0				183,627,030
Money Market Fund			0.1				253,687
			100.0	%		$	244,980,389

 

The summary of inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Common Stocks*		$	244,726,702			$	—				$	—			$	244,726,702
Money Market Fund			253,687				—					—				253,687
Repurchase Agreements			—				28,827,206					—				28,827,206
Total		$	244,980,389			$	28,827,206				$	—			$	273,807,595

 

* See Schedule of Investments for geographic sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2018.

 

See Notes to Financial Statements

VANECK VECTORS RETAIL ETF

SCHEDULE OF INVESTMENTS

March 31, 2018 (unaudited)

 

 

 

Definitions:

ADR	American Depositary Receipt
Footnotes:
*	Non-income producing

 

Summary of Investments by Sector		% of Investments				Value
Consumer Discretionary			64.8	%		$	43,617,204
Consumer Staples			28.8				19,391,879
Health Care			6.4				4,300,572
Money Market Fund			0.0				7,123
			100.0	%		$	67,316,778

 

The summary of inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs					Level 3 Significant Unobservable Inputs					Value
Common Stocks*		$	67,309,655				$	—				$	—			$	67,309,655
Money Market Fund			7,123					—					—				7,123
Total		$	67,316,778				$	—				$	—			$	67,316,778

 

* See Schedule of Investments for geographic sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2018.

 

See Notes to Financial Statements

VANECK VECTORS SEMICONDUCTOR ETF

SCHEDULE OF INVESTMENTS

March 31, 2018 (unaudited)

 

 

See Notes to Financial Statements

 

 

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 $28,540,980.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned		% of Investments				Value
Information Technology			16.1	%		$	172,393,339
Semiconductor Equipment			20.8				222,440,382
Semiconductors			63.0				675,813,828
Money Market Fund			0.1				1,253,516
			100.0	%		$	1,071,901,065

 

The summary of inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Common Stocks*		$	1,070,647,549			$	—				$	—			$	1,070,647,549
Money Market Fund			1,253,516				—					—				1,253,516
Repurchase Agreements			—				29,090,395					—				29,090,395
Total		$	1,071,901,065			$	29,090,395				$	—			$	1,100,991,460

 

*	See Schedule of Investments for geographic sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2018.

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF ASSETS AND LIABILITIES

March 31, 2018 (unaudited)

 

		Biotech ETF				Environmental Services ETF				Gaming ETF				Generic Drugs ETF
Assets:
Investments, at value
Unaffiliated issuers (1) (2)		$	439,153,495			$	21,269,719			$	53,115,073			$	3,715,612
Short-term investments held as collateral for securities loaned (3)			1,542,625				1,704,843				2,239,962				170,345
Cash			—				—				—				—
Cash denominated in foreign currency, at value (4)			—				—				—				2,458
Receivables:
Investment securities sold			—				790,975				812,481				1,381
Shares sold			—				—				—				—
Due from Adviser			—				—				—				5,667
Dividends			180,021				24,454				205,382				3,106
Prepaid expenses			8,510				178				259				36
Total assets			440,884,651				23,790,169				56,373,157				3,898,605
Liabilities:
Payables:
Investment securities purchased			—				807,462				812,843				1,376
Collateral for securities loaned			1,542,625				1,704,843				2,239,962				170,345
Line of credit			455,842				—				146,004				—
Shares redeemed			—				—				—				—
Due to Adviser			123,833				2,855				20,326				—
Due to custodian			—				—				2,868				—
Deferred Trustee fees			37,605				2,503				6,381				14
Accrued expenses			73,218				55,217				54,250				59,582
Total liabilities			2,233,123				2,572,880				3,282,634				231,317
NET ASSETS		$	438,651,528			$	21,217,289			$	53,090,523			$	3,667,288
Shares outstanding			3,646,503				250,000				1,150,000				150,000
Net asset value, redemption and offering price per share		$	120.29			$	84.87			$	46.17			$	24.45
Net assets consist of:
Aggregate paid in capital		$	507,455,197			$	26,135,441			$	57,948,668			$	3,727,174
Net unrealized appreciation (depreciation)			(70,327,589	)			1,745,160				1,011,830				153,287
Undistributed (accumulated) net investment income (loss)			557,375				36,954				345,277				(36,778	)
Accumulated net realized gain (loss)			966,545				(6,700,266	)			(6,215,252	)			(176,395	)
		$	438,651,528			$	21,217,289			$	53,090,523			$	3,667,288
(1) Value of securities on loan		$	1,465,812			$	1,680,079			$	2,144,566			$	170,906
(2) Cost of investments		$	509,481,084			$	19,524,559			$	52,104,715			$	3,562,519
(3) Cost of short-term investments held as collateral for securities loaned		$	1,542,625			$	1,704,843			$	2,239,962			$	170,345
(4) Cost of cash denominated in foreign currency		$	—			$	—			$	—			$	2,413

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF ASSETS AND LIABILITIES

March 31, 2018 (unaudited)

 

		Pharmaceutical ETF				Retail ETF				Semiconductor ETF
Assets:
Investments, at value
Unaffiliated issuers (1) (2)		$	244,980,389			$	67,316,778			$	1,071,901,065
Short-term investments held as collateral for securities loaned (3)			28,827,206				—				29,090,395
Cash			73,719				—				132,728
Receivables:
Shares sold			—				—				3,445
Dividends			952,272				68,702				83,550
Prepaid expenses			5,281				753				8,110
Total assets			274,838,867				67,386,233				1,101,219,293
Liabilities:
Payables:
Collateral for securities loaned			28,827,206				—				29,090,395
Line of credit			—				72,801				—
Shares redeemed			244				—				—
Due to Adviser			60,527				11,095				369,674
Deferred Trustee fees			22,667				5,143				26,928
Accrued expenses			42,364				52,711				28,619
Total liabilities			28,953,008				141,750				29,515,616
NET ASSETS		$	245,885,859			$	67,244,483			$	1,071,703,677
Shares outstanding			4,338,138				721,531				10,270,937
Net asset value, redemption and offering price per share		$	56.68			$	93.20			$	104.34
Net assets consist of:
Aggregate paid in capital		$	316,966,079			$	69,947,091			$	960,976,912
Net unrealized depreciation			(80,432,066	)			(4,950,867	)			(89,737,033	)
Undistributed net investment income			1,681,200				196,912				903,403
Accumulated net realized gain			7,670,646				2,051,347				199,560,395
		$	245,885,859			$	67,244,483			$	1,071,703,677
(1) Value of securities on loan		$	28,238,597			$	—			$	28,540,980
(2) Cost of investments		$	325,412,455			$	72,267,645			$	1,161,638,098
(3) Cost of short-term investments held as collateral for securities loaned		$	28,827,206			$	—			$	29,090,395
(4) Cost of cash denominated in foreign currency		$	—			$	—			$	—

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF OPERATIONS

For the Six Months Ended March 31, 2018 (unaudited)

 

		Biotech ETF				Environmental Services ETF				Gaming ETF				Generic Drugs ETF
Income:
Dividends		$	2,390,386			$	119,874			$	595,187			$	7,921
Securities lending income			19,242				1,756				3,441				681
Foreign taxes withheld			(39,167	)			(1,136	)			(16,786	)			(814	)
Total income			2,370,461				120,494				581,842				7,788
Expenses:
Management fees			1,063,068				45,456				107,812				9,053
Professional fees			43,337				30,709				30,689				30,428
Insurance			3,345				100				186				18
Trustees’ fees and expenses			7,234				180				372				7
Reports to shareholders			25,027				6,239				7,658				6,603
Indicative optimized portfolio value fee			2,519				—				3,388				2,528
Custodian fees			9,423				1,266				6,439				7,436
Registration fees			2,922				2,967				3,202				2,178
Transfer agent fees			1,212				1,212				1,211				1,212
Fund accounting fees			20,432				529				1,911				1,135
Interest			3,847				672				1,269				70
Other			9,822				2,742				3,343				3,129
Total expenses			1,192,188				92,072				167,480				63,797
Waiver of management fees			(125,271	)			(41,398	)			(26,055	)			(9,053	)
Expenses assumed by the Adviser			—				—				—				(44,715	)
Net expenses			1,066,917				50,674				141,425				10,029
Net investment income (loss)			1,303,544				69,820				440,417				(2,241	)
Net realized gain (loss) on:
Investments			(779,558	)			92,746				(511,867	)			53,543
In-kind redemptions			14,205,610				—				1,013,278				—
Foreign currency transactions and foreign denominated assets and liabilities			—				—				(2,682	)			(383	)
Net realized gain			13,426,052				92,746				498,729				53,160
Net change in unrealized appreciation (depreciation) on:
Investments			(74,582,338	)			(283,680	)			1,989,230				310,438
Foreign currency transactions and foreign denominated assets and liabilities			—				—				1,396				122
Net change in unrealized appreciation (depreciation)			(74,582,338	)			(283,680	)			1,990,626				310,560
Net Increase (Decrease) in Net Assets Resulting from Operations		$	(59,852,742	)		$	(121,114	)		$	2,929,772			$	361,479

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF OPERATIONS

For the Six Months Ended March 31, 2018 (unaudited)

 

		Pharmaceutical ETF				Retail ETF				Semiconductor ETF
Income:
Dividends		$	3,007,526			$	486,490			$	5,941,137
Securities lending income			18,592				646				57,229
Foreign taxes withheld			(105,770	)			—				—
Total income			2,920,348				487,136				5,998,366
Expenses:
Management fees			474,839				110,625				2,070,564
Professional fees			35,981				34,996				44,674
Insurance			1,374				269				2,464
Trustees’ fees and expenses			3,033				528				5,561
Reports to shareholders			13,443				13,781				17,512
Indicative optimized portfolio value fee			2,531				2,519				2,531
Custodian fees			4,546				3,094				11,983
Registration fees			3,044				2,543				2,552
Transfer agent fees			1,211				1,186				1,211
Fund accounting fees			8,707				1,834				23,462
Interest			6,860				513				25,658
Other			3,259				2,618				8,219
Total expenses			558,828				174,506				2,216,391
Waiver of management fees			(77,130	)			(63,367	)			(120,170	)
Net expenses			481,698				111,139				2,096,221
Net investment income (loss)			2,438,650				375,997				3,902,145
Net realized gain (loss) on:
Investments			491,573				(496,834	)			(287,984	)
In-kind redemptions			19,260,534				5,336,571				201,922,502
Net realized gain			19,752,107				4,839,737				201,634,518
Net change in unrealized appreciation (depreciation) on:
Investments			(20,076,520	)			3,136,221				(85,649,002	)
Net change in unrealized appreciation (depreciation)			(20,076,520	)			3,136,221				(85,649,002	)
Net Increase (Decrease) in Net Assets Resulting from Operations		$	2,114,237			$	8,351,955			$	119,887,661

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

		Biotech ETF								Environmental Services ETF
		For the Period				For the Year				For the Period				For the Year
		Ended				Ended				Ended				Ended
		March 31,				September 30,				March 31,				September 30,
		2018				2017				2018				2017
		(unaudited)								(unaudited)
Operations:
Net investment income		$	1,303,544			$	3,140,614			$	69,820			$	159,868
Net realized gain			13,426,052				14,003,280				92,746				3,729,077
Net change in unrealized appreciation (depreciation)			(74,582,338	)			84,996,662				(283,680	)			178,828
Net increase (decrease) in net assets resulting from operations			(59,852,742	)			102,140,556				(121,114	)			4,067,773
Dividends to shareholders:
Dividends from net investment income			(3,276,012	)			(1,715,606	)			(155,000	)			(132,750	)
Share transactions:**
Proceeds from sale of shares			32,367,461				188,497,661				4,289,191				12,005,278
Cost of shares redeemed			(247,917,612	)			(170,506,515	)			—				(16,156,568	)
Increase (Decrease) in net assets resulting from share transactions			(215,550,151	)			17,991,146				4,289,191				(4,151,290	)
Total increase (decrease) in net assets			(278,678,905	)			118,416,096				4,013,077				(216,267	)
Net Assets, beginning of period			717,330,433				598,914,337				17,204,212				17,420,479
Net Assets, end of period†		$	438,651,528			$	717,330,433			$	21,217,289			$	17,204,212
† Including undistributed net investment income		$	557,375			$	2,529,843			$	36,954			$	122,134
** Shares of Common Stock Issued (no par value)
Shares sold			250,000				1,600,000				50,000				150,000
Shares redeemed			(1,950,000	)			(1,450,000	)			—				(200,000	)
Net increase (decrease)			(1,700,000	)			150,000				50,000				(50,000	)

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

		Gaming ETF								Generic Drugs ETF								Pharmaceutical ETF
		For the Period				For the Year				For the Period				For the Year				For the Period				For the Year
		Ended				Ended				Ended				Ended				Ended				Ended
		March 31,				September 30,				March 31,				September 30,				March 31,				September 30,
		2018				2017				2018				2017				2018				2017
		(unaudited)								(unaudited)								(unaudited)
Operations:
Net investment income (loss)		$	440,417			$	678,799			$	(2,241	)		$	16,273			$	2,438,650			$	6,048,603
Net realized gain			498,729				1,103,183				53,160				67,042				19,752,107				7,980,033
Net change in unrealized appreciation (depreciation)			1,990,626				2,501,573				310,560				(106,625	)			(20,076,520	)			1,765,322
Net increase (decrease) in net assets resulting from operations			2,929,772				4,283,555				361,479				(23,310	)			2,114,237				15,793,958
Dividends to shareholders:
Dividends from net investment income			(700,050	)			(586,300	)			(55,050	)			(19,400	)			(1,824,549	)			(5,854,105	)
Share transactions:**
Proceeds from sale of shares			32,117,050				14,154,237				—				4,333,286				319,496,500				786,410,157
Cost of shares redeemed			(4,691,937	)			(14,296,884	)			—				(3,365,817	)			(359,090,305	)			(743,098,245	)
Increase (Decrease) in net assets resulting from share transactions			27,425,113				(142,647	)			—				967,469				(39,593,805	)			43,311,912
Total increase (decrease) in net assets			29,654,835				3,554,608				306,429				924,759				(39,304,117	)			53,251,765
Net Assets, beginning of period			23,435,688				19,881,080				3,360,859				2,436,100				285,189,976				231,938,211
Net Assets, end of period†		$	53,090,523			$	23,435,688			$	3,667,288			$	3,360,859			$	245,885,859			$	285,189,976
† Including undistributed (accumulated) net investment income (loss)		$	345,277			$	604,910			$	(36,778	)		$	20,513			$	1,681,200			$	1,067,099
** Shares of Common Stock Issued (no par value)
Shares sold			700,000				350,000				—				200,000				5,450,000				14,500,000
Shares redeemed			(100,000	)			(350,000	)			—				(150,000	)			(6,050,000	)			(13,600,000	)
Net increase (decrease)			600,000				—				—				50,000				(600,000	)			900,000

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

		Retail ETF								Semiconductor ETF
		For the Period				For the Year				For the Period				For the Year
		Ended				Ended				Ended				Ended
		March 31,				September 30,				March 31,				September 30,
		2018				2017				2018				2017
		(unaudited)								(unaudited)
Operations:
Net investment income		$	375,997			$	1,177,871			$	3,902,145			$	9,564,945
Net realized gain			4,839,737				182,469				201,634,518				221,347,767
Net change in unrealized appreciation (depreciation)			3,136,221				2,134,169				(85,649,002	)			(6,994,961	)
Net increase in net assets resulting from operations			8,351,955				3,494,509				119,887,661				223,917,751
Dividends to shareholders:
Dividends from net investment income			(1,030,346	)			(1,772,514	)			(10,499,228	)			(4,764,060	)
Share transactions:**
Proceeds from sale of shares			46,104,387				32,054,970				7,660,077,499				10,938,048,365
Cost of shares redeemed			(44,927,797	)			(93,737,069	)			(7,497,814,912	)			(10,934,279,639	)
Increase (Decrease) in net assets resulting from share transactions			1,176,590				(61,682,099	)			162,262,587				3,768,726
Total increase (decrease) in net assets			8,498,199				(59,960,104	)			271,651,020				222,922,417
Net Assets, beginning of period			58,746,284				118,706,388				800,052,657				577,130,240
Net Assets, end of period†		$	67,244,483			$	58,746,284			$	1,071,703,677			$	800,052,657
† Including undistributed net investment income		$	196,912			$	851,261			$	903,403			$	7,500,486
** Shares of Common Stock Issued (no par value)
Shares sold			500,000				400,000				74,750,000				137,800,000
Shares redeemed			(500,000	)			(1,200,000	)			(73,050,000	)			(137,550,000	)
Net increase (decrease)			—				(800,000	)			1,700,000				250,000

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		Biotech ETF
		For the
		Six Months
		Ended
		March 31,					For the Year Ended September 30,
		2018					2017				2016				2015				2014			2013
		(unaudited)
Net asset value, beginning of period			$	134.17			$	115.25			$	114.45			$	105.84			$	82.74			$	54.07
Income from investment operations:
Net investment income (loss)				0.27	(a)			0.58	(a)			0.33				0.24				(0.03	)			0.01
Net realized and unrealized gain (loss) on investments				(13.47	)			18.67				0.81				8.37				23.13				28.85
Total from investment operations				(13.20	)			19.25				1.14				8.61				23.10				28.86
Less:
Dividends from net investment income				(0.68	)			(0.33	)			(0.34	)			—				—	(f)			(0.02	)
Distributions from net realized capital gains				—				—				—				—				—				(0.17	)
Total dividends and distributions				(0.68	)			(0.33	)			(0.34	)			—				—				(0.19	)
Net asset value, end of period			$	120.29			$	134.17			$	115.25			$	114.45			$	105.84			$	82.74
Total return (b)				(9.86	)%(c)			16.77	%			0.97	%			8.13	%			27.92	%			53.55	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$438,652				$717,330				$598,914				$651,978				$539,423				$434,089
Ratio of gross expenses to average net assets				0.39	%(d)			0.39	%			0.40	%			0.40	%			0.41	%			0.41	%
Ratio of net expenses to average net assets				0.35	%(d)			0.35	%			0.35	%			0.35	%			0.35	%			0.35	%
Ratio of net expenses to average net assets excluding interest expense				0.35	%(d)			0.35	%			0.35	%			0.35	%			0.35	%			0.35	%
Ratio of net investment income (loss) to average net assets				0.43	%(d)			0.48	%			0.29	%			0.18	%			(0.03	)%			0.01	%
Portfolio turnover rate (e)				14	%(c)			27	%			41	%			12	%			11	%			0	%
		Environmental Services ETF
		For the
		Six Months
		Ended
		March 31,					For the Year Ended September 30,
		2018					2017				2016				2015				2014			2013
		(unaudited)
Net asset value, beginning of period			$	86.02			$	69.68			$	58.37			$	64.57			$	62.43			$	49.65
Income from investment operations:
Net investment income				0.33	(a)			0.66	(a)			0.63				0.73				1.00				0.91
Net realized and unrealized gain (loss) on investments				(0.70	)			16.21				11.36				(5.88	)			1.89				12.66
Total from investment operations				(0.37	)			16.87				11.99				(5.15	)			2.89				13.57
Less:
Dividends from net investment income				(0.78	)			(0.53	)			(0.68	)			(1.05	)			(0.75	)			(0.79	)
Net asset value, end of period			$	84.87			$	86.02			$	69.68			$	58.37			$	64.57			$	62.43
Total return (b)				(0.45	)%(c)			24.31	%			20.75	%			(8.18	)%			4.62	%			27.67	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$21,217				$17,204				$17,420				$14,593				$16,142				$18,729
Ratio of gross expenses to average net assets				1.01	%(d)			0.95	%			0.93	%			1.15	%			0.92	%			1.01	%
Ratio of net expenses to average net assets				0.56	%(d)			0.55	%			0.55	%			0.55	%			0.55	%			0.55	%
Ratio of net expenses to average net assets excluding interest expense				0.55	%(d)			0.55	%			0.55	%			0.55	%			0.55	%			0.55	%
Ratio of net investment income to average net assets				0.77	%(d)			0.86	%			1.00	%			1.15	%			1.32	%			1.60	%
Portfolio turnover rate (e)				12	%(c)			20	%			40	%			19	%			13	%			5	%

(a)	Calculated based upon average shares outstanding
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Not Annualized
(d)	Annualized
(e)	Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions.
(f)	Amount represents less than $0.005 per share

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		Gaming ETF
		For the
		Six Months
		Ended
		March 31,					For the Year Ended September 30,
		2018					2017				2016				2015				2014			2013
		(unaudited)
Net asset value, beginning of period			$	42.61			$	36.15			$	29.82			$	43.38			$	47.49			$	34.22
Income from investment operations:
Net investment income				0.47	(a)			1.13	(a)			0.94	(a)			1.12	(a)			1.76				1.10
Net realized and unrealized gain (loss) on investments				4.17				6.40				6.69				(12.80	)			(5.35	)			13.55
Total from investment operations				4.64				7.53				7.63				(11.68	)			(3.59	)			14.65
Less:
Dividends from net investment income				(1.08	)			(1.07	)			(1.30	)			(1.88	)			(0.52	)			(1.38	)
Net asset value, end of period			$	46.17			$	42.61			$	36.15			$	29.82			$	43.38			$	47.49
Total return (b)				10.89	%(c)			21.58	%			26.23	%			(27.91	)%			(7.76	)%			44.14	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$53,091				$23,436				$19,881				$23,859				$43,384				$56,982
Ratio of gross expenses to average net assets				0.77	%(d)			0.94	%			0.93	%			1.00	%			0.73	%			0.83	%
Ratio of net expenses to average net assets				0.65	%(d)			0.65	%			0.67	%			0.66	%			0.65	%			0.65	%
Ratio of net expenses to average net assets excluding interest expense				0.65	%(d)			0.65	%			0.65	%			0.65	%			0.65	%			0.65	%
Ratio of net investment income to average net assets				2.03	%(d)			2.97	%			2.88	%			2.92	%			2.73	%			2.73	%
Portfolio turnover rate (e)				16	%(c)			22	%			29	%			27	%			35	%			16	%

 

	Generic Drugs ETF
											For the Period
	For the Six										January 12,
	Months					For the Year					2016 (f)
	Ended					Ended					through
	March 31,					September 30,					September 30,
	2018					2017					2016
	(unaudited)
Net asset value, beginning of period		$	22.41				$	24.36				$	25.21
Income from investment operations:
Net investment income (loss)			(0.01	)(a)				0.09	(a)				0.07
Net realized and unrealized gain (loss) on investments			2.42					(1.94	)				(0.92	)
Total from investment operations			2.41					(1.85	)				(0.85	)
Less:
Dividends from net investment income			(0.37	)				(0.10	)				—
Net asset value, end of period		$	24.45				$	22.41				$	24.36
Total return (b)			10.78	%(c)				(7.58	)%				(3.37	)%(c)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$	3,667				$	3,361				$	2,436
Ratio of gross expenses to average net assets			3.52	%(d)				2.94	%				5.70	%(d)
Ratio of net expenses to average net assets			0.55	%(d)				0.57	%				0.55	%(d)
Ratio of net expenses to average net assets excluding interest expense			0.55	%(d)				0.55	%				0.55	%(d)
Ratio of net investment income (loss) to average net assets			(0.12	)%(d)				0.40	%				0.39	%(d)
Portfolio turnover rate (e)			3	%(c)				61	%				47	%(c)

(a)	Calculated based upon average shares outstanding
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Not Annualized
(d)	Annualized
(e)	Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions.
(f)	Commencement of operations

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		Pharmaceutical ETF
		For the
		Six Months
		Ended
		March 31,					For the Year Ended September 30,
		2018					2017				2016				2015				2014			2013
		(unaudited)
Net asset value, beginning of period			$	57.75			$	57.44			$	63.01			$	63.54			$	47.89			$	41.03
Income from investment operations:
Net investment income				0.53	(a)			1.18	(a)			1.24	(a)			1.31				1.02				1.08
Net realized and unrealized gain (loss) on investments				(1.23	)			0.26				(5.41	)			(0.62	)			15.66				7.78
Total from investment operations				(0.70	)			1.44				(4.17	)			0.69				16.68				8.86
Less:
Dividends from net investment income				(0.37	)			(1.13	)			(1.40	)			(1.22	)			(1.03	)			(2.00	)
Net asset value, end of period			$	56.68			$	57.75			$	57.44			$	63.01			$	63.54			$	47.89
Total return (b)				(1.24	)%(c)			2.59	%			(6.72	)%			0.96	%			35.19	%			22.44	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$245,886				$285,190				$231,938				$314,297				$405,888				$241,267
Ratio of gross expenses to average net assets				0.41	%(d)			0.40	%			0.41	%			0.41	%			0.42	%			0.43	%
Ratio of net expenses to average net assets				0.36	%(d)			0.35	%			0.35	%			0.36	%			0.35	%			0.35	%
Ratio of net expenses to average net assets excluding interest expense				0.35	%(d)			0.35	%			0.35	%			0.35	%			0.35	%			0.35	%
Ratio of net investment income to average net assets				1.80	%(d)			2.14	%			2.04	%			1.78	%			1.85	%			2.30	%
Portfolio turnover rate (e)				9	%(c)			40	%			25	%			12	%			14	%			3	%
		Retail ETF
		For the
		Six Months
		Ended
		March 31,					For the Year Ended September 30,
		2018					2017				2016				2015				2014			2013
		(unaudited)
Net asset value, beginning of period			$	81.42			$	78.02			$	73.57			$	62.27			$	55.34			$	44.88
Income from investment operations:
Net investment income				0.54	(a)			1.15	(a)			0.93	(a)			1.12	(a)			0.60				0.27
Net realized and unrealized gain on investments				12.67				3.64				5.27				10.47				6.94				11.04
Total from investment operations				13.21				4.79				6.20				11.59				7.54				11.31
Less:
Dividends from net investment income				(1.43	)			(1.39	)			(1.75	)			(0.29	)			(0.61	)			(0.85	)
Net asset value, end of period			$	93.20			$	81.42			$	78.02			$	73.57			$	62.27			$	55.34
Total return (b)				16.26	%(c)			6.25	%			8.42	%			18.63	%			13.65	%			25.69	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$67,244				$58,746				$118,706				$203,909				$66,724				$42,696
Ratio of gross expenses to average net assets				0.55	%(d)			0.50	%			0.43	%			0.42	%			0.63	%			0.69	%
Ratio of net expenses to average net assets				0.35	%(d)			0.35	%			0.35	%			0.35	%			0.35	%			0.35	%
Ratio of net expenses to average net assets excluding interest expense				0.35	%(d)			0.35	%			0.35	%			0.35	%			0.35	%			0.35	%
Ratio of net investment income to average net assets				1.19	%(d)			1.46	%			1.22	%			1.49	%			1.23	%			1.84	%
Portfolio turnover rate (e)				14	%(c)			17	%			9	%			5	%			3	%			3	%

(a)	Calculated based upon average shares outstanding
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Not Annualized
(d)	Annualized
(e)	Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions.

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		Semiconductor ETF
		For the
		Six Months
		Ended
		March 31,					For the Year Ended September 30,
		2018					2017				2016				2015				2014			2013
		(unaudited)
Net asset value, beginning of period			$	93.34			$	69.36			$	49.97			$	51.10			$	39.88			$	31.66
Income from investment operations:
Net investment income				0.34	(a)			1.10	(a)			0.82	(a)			1.08	(a)			0.62				0.72
Net realized and unrealized gain (loss) on investments				12.06				23.46				19.67				(1.58	)			11.26				8.20
Payment from Adviser				—				—				0.04	(f)			—				—				—
Total from investment operations				12.40				24.56				20.53				(0.50	)			11.88				8.92
Less:
Dividends from net investment income				(1.40	)			(0.58	)			(1.14	)			(0.63	)			(0.66	)			(0.70	)
Net asset value, end of period			$	104.34			$	93.34			$	69.36			$	49.97			$	51.10			$	39.88
Total return (b)				13.36	%(c)			35.63	%			41.73	%			(1.09	)%			30.13	%			28.70	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$1,071,704				$800,053				$577,130				$190,923				$414,959				$262,017
Ratio of gross expenses to average net assets				0.37	%(d)			0.38	%			0.41	%			0.41	%			0.41	%			0.43	%
Ratio of net expenses to average net assets				0.35	%(d)			0.35	%			0.36	%			0.35	%			0.35	%			0.35	%
Ratio of net expenses to average net assets excluding interest expense				0.35	%(d)			0.35	%			0.35	%			0.35	%			0.35	%			0.35	%
Ratio of net investment income to average net assets				0.66	%(d)			1.38	%			1.45	%			2.01	%			1.68	%			1.81	%
Portfolio turnover rate (e)				7	%(c)			22	%			53	%			18	%			9	%			4	%

(a)	Calculated based upon average shares outstanding
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Not Annualized
(d)	Annualized
(e)	Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions.
(f)	0.06% of total return, representing $0.04 per share, consisted of a payment by the Adviser (See Note 3).

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

March 31, 2018 (unaudited)

 

Note 1—Fund Organization—VanEck Vectors ETF Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust was incorporated in Delaware as a statutory trust on March 15, 2001. The Trust operates as a series fund, and as of March 31, 2018, offers fifty-six investment portfolios, each of which represents a separate series of the Trust.

 

These financial statements relate only to the following investment portfolios: Biotech ETF, Environmental Services ETF, Gaming ETF, Generic Drugs ETF, Pharmaceutical ETF, Retail ETF and Semiconductor ETF (each a “Fund” and, together, the “Funds”). Each Fund was created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the common stocks in substantially the same weighting, in an index published by Indxx LLC, ICE Data Indices, LLC or MV Index Solutions GmbH (“MVIS”), a wholly owned subsidiary of Van Eck Associates Corporation (the “Adviser”).

 

The Funds’ respective indices are presented below:

 

Fund	Index
Biotech ETF	MVIS® US Listed Biotech 25 Index*
Environmental Services ETF	NYSE Arca Environmental Services Index
Gaming ETF	MVIS® Global Gaming Index*
Generic Drugs ETF	Indxx Global Generics & New Pharma Index
Pharmaceutical ETF	MVIS® US Listed Pharmaceutical 25 Index*
Retail ETF	MVIS® US Listed Retail 25 Index*
Semiconductor ETF	MVIS® US Listed Semiconductor 25 Index*

 

*	Published by MV Index Solutions GmbH

 

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 are following accounting and reporting requirements of Accounting Standards Codification (“ASC”) 946 Financial Services — Investment Companies.

 

The following is a summary of significant accounting policies followed by the Funds.

 

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 or traded on the NASDAQ National Market System are valued at the last sales price as reported at the close of each business day. Securities traded on the NASDAQ Stock Market are valued at the NASDAQ official closing price. Over-the-counter securities not included in the NASDAQ National Market System and listed securities for which no sale was reported are valued at the mean of the bid and ask prices. To the extent these securities are actively traded they are categorized as Level 1 in the fair value hierarchy (as described below). Certain foreign securities, whose values may be affected by market direction or events occurring before the Funds’ pricing time (4:00 p.m. Eastern Time) but after the last close of the securities’ primary market, are fair valued using a pricing service and are categorized as Level 2 in the fair value hierarchy. The pricing service, using methods approved by the Board of Trustees, considers the correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant ADR’s and futures contracts. The Funds may also fair value securities in other situations, such as, when a particular foreign market is closed but the Fund is open. Short-term debt securities with sixty days or less to maturity are valued at amortized cost, which with accrued interest approximates fair value. Money market fund investments are valued at net asset value and are considered to be Level 1 in the fair value hierarchy. The Pricing Committee of the Adviser provides oversight of the Funds’ valuation policies and procedures, which are approved by the Funds’ Board of Trustees. Among other things, these procedures allow the Funds to utilize independent pricing services, quotations from securities dealers, and other market sources to determine fair value. The Pricing Committee convenes regularly to review the fair value of financial instruments or other assets. If market quotations for a security or other asset are not readily available, or if the Adviser believes it does not otherwise reflect the fair value of a security or asset, the security or asset will be fair valued by the Pricing Committee in accordance with the Funds’ valuation policies and

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

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 transfers between levels of the fair value hierarchy assume the financial instruments where transferred at the beginning of the reporting period. 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, the levels used to value the Funds’ investments, and transfers between levels are located in the Schedules of Investments. Additionally, tables that reconcile the valuation of the Funds’ Level 3 investments and that present additional information about valuation methodologies and unobservable inputs, if applicable, are located in the Schedules of Investments.

 

B.

Federal Income Taxes—It is each Fund’s policy to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.

 

C.

Dividends and Distributions to Shareholders—Dividends to shareholders from net investment income and distributions from net realized capital gains, if any, are declared and paid annually by each Fund (except for dividends from net investment income on Pharmaceutical ETF, which are declared and paid quarterly). Income dividends and capital gain distributions are determined in accordance with U.S. income tax regulations, which may differ from such amounts determined in accordance with GAAP.

 

D.

Currency Translation—Assets and liabilities denominated in foreign currencies and commitments under foreign currency contracts are translated into U.S. dollars at the closing prices of such currencies each business day as quoted by one or more sources. Purchases and sales of investments are translated at the exchange rates prevailing when such investments are acquired or sold. Foreign denominated income and expenses are translated at the exchange rates prevailing when accrued. The portion of realized and unrealized gains and losses on investments that result from fluctuations in foreign currency exchange rates is not separately disclosed in the financial statements. Recognized gains or losses attributable to foreign currency fluctuations on foreign currency denominated assets, other than investments, and liabilities are recorded as net realized gain (loss) on foreign currency transactions and foreign denominated assets and liabilities in the Statements of Operations.

 

E.

Restricted Securities—The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Fund’s Schedule of Investments.

 

 

F.

Repurchase Agreements—The Funds may enter into repurchase agreements with financial institutions, deemed to be creditworthy by the Adviser, to generate income from their excess cash balances and to invest securities lending cash collateral. A repurchase agreement is an agreement under which a Fund acquires securities from a seller, subject to resale to the seller at an agreed upon price and date. A Fund, through its custodian/securities lending agent, takes possession of securities collateralizing the repurchase agreement. Pursuant to the terms of the repurchase agreement, such securities must have an aggregate market value greater than or equal to the terms of the repurchase price plus accrued interest at all times. If the value of the underlying securities falls below the value of the repurchase price plus accrued interest, the Funds will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults on its repurchase obligation, the Funds maintain their right to sell the underlying securities at market value and may claim any resulting loss against the seller. Repurchase agreements held as of March 31, 2018 are reflected in the Schedules of Investments.

 

G.

Offsetting Assets and Liabilities—In the ordinary course of business, the Funds enter into transactions subject to enforceable master netting or other similar agreements. Generally, the right of setoff in those agreements allows the Funds to set off any exposure to a specific counterparty with any collateral received or delivered to that counterparty based on the terms of the agreements. The Funds may pledge or receive cash and/or securities as collateral for derivative instruments, securities lending and repurchase agreements. For financial reporting purposes, the Funds present securities lending and repurchase agreement assets and liabilities on a gross basis in the Statements of Assets and Liabilities. Collateral held at March 31, 2018 is presented in the Schedules of Investments. Refer to related disclosures in Note 2F (Repurchase Agreements) and 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.

 

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, 2019, 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. Refer to the Statements of Operations for the amounts waived/assumed by the Adviser for the period ended March 31, 2018.

 

The current expense limitations and management fee rates are as follows:

 

Fund		Expense Limitations				Management Fee Rates
Biotech ETF			0.35	%			0.35	%
Environmental Services ETF			0.55				0.50
Gaming ETF			0.65				0.50
Generic Drugs ETF			0.55				0.50
Pharmaceutical ETF			0.35				0.35
Retail ETF			0.35				0.35
Semiconductor ETF			0.35				0.35

 

During the year ended September 30, 2016, the Adviser voluntarily reimbursed the Semiconductor ETF $340,000 for transactional losses. The per share and total return impact to the Fund is reflected in the Financial Highlights.

 

In addition, Van Eck Securities Corporation (the “Distributor”), an affiliate of the Adviser, acts as the Funds’ distributor. Certain officers and a Trustee of the Trust are officers, directors or stockholders of the Adviser and Distributor.

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

Note 4—Investments—For the period ended March 31, 2018, the cost of purchases and proceeds from sales of investments other than U.S. government obligations and short-term obligations (excluding in-kind transactions described in Note 6) were as follows:

 

Fund		Cost of Investments  Purchased				Proceeds from  Investments Sold
Biotech ETF			$84,113,285				$85,729,913
Environmental Services ETF			2,210,087				2,304,141
Gaming ETF			8,584,537				7,022,826
Generic Drugs ETF			121,705				166,994
Pharmaceutical ETF			23,128,123				23,179,553
Retail ETF			9,065,529				9,538,423
Semiconductor ETF			73,211,942				88,145,753

 

Note 5—Income Taxes—As of March 31, 2018, for Federal income tax purposes, the identified cost of investments owned, net unrealized appreciation (depreciation), gross unrealized appreciation, and gross unrealized depreciation of investments were as follows:

 

Fund		Cost of Investments				Gross Unrealized Appreciation				Gross Unrealized Depreciation				Net Unrealized Appreciation (Depreciation)
Biotech ETF			$  512,008,932				$21,014,142				$(92,326,954	)			$(71,312,812	)
Environmental Services ETF			21,236,080				2,383,933				(645,451	)			1,738,482
Gaming ETF			54,907,405				3,931,558				(3,483,928	)			447,630
Generic Drugs ETF			3,761,677				756,826				(632,546	)			124,280
Pharmaceutical ETF			354,242,100				1,465,825				(81,900,330	)			(80,434,505	)
Retail ETF			72,302,254				3,258,660				(8,244,136	)			(4,985,476	)
Semiconductor ETF			1,190,728,493				896,749				(90,633,782	)			(89,737,033	)

 

The tax character of dividends paid to shareholders during the year ended September 30, 2017 was as follows:

 

Fund		Ordinary Income
Biotech ETF			$1,715,606
Environmental Services ETF			132,750
Gaming ETF			586,300
Generic Drugs ETF			19,400
Pharmaceutical ETF			5,854,105
Retail ETF			1,772,514
Semiconductor ETF			4,764,060

 

The tax character of current year distributions will be determined at the end of the current fiscal year.

 

At September 30, 2017, 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				Amount Expiring in the Year Ended September 30, 2018				Total
Biotech ETF		$	—			$	(11,474,284	)		$	—			$	(11,474,284	)
Environmental Services ETF			(539,614	)			(5,764,706	)			(479,375	)			(6,783,695	)
Gaming ETF			(2,187,113	)			(3,941,930	)			—				(6,129,043	)
Generic Drugs ETF			(120,655	)			(80,087	)			—				(200,742	)
Pharmaceutical ETF			(5,362,815	)			(6,716,207	)			—				(12,079,022	)
Retail ETF			(1,336,686	)			(1,417,095	)			—				(2,753,781	)
Semiconductor ETF			(1,648,128	)			(425,995	)			—				(2,074,123	)

 

The Funds recognize the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by applicable tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on return filings for all open tax years. The Funds do not have exposure for additional years that might still be open in

 

 

certain foreign jurisdictions. Therefore, no provision for income tax is required in the Funds’ financial statements. However, certain Funds are subject to foreign taxes on the appreciation in value of certain investments. The Funds provide for such taxes on both realized and unrealized appreciation.

 

The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the period ended March 31, 2018, the Funds did not incur any interest or penalties.

 

Note 6—Capital Share Transactions—As of March 31, 2018, there was an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Fund shares are not individually redeemable and are issued and redeemed at their net asset value per share only through certain authorized broker-dealers (“Authorized Participants”) in blocks of shares (“Creation Units”), consisting of 50,000 shares, or multiples thereof.

 

The consideration for the purchase or redemption of Creation Units of the Funds generally consists of the in-kind contribution or distribution of securities constituting the Funds’ underlying index (“Deposit Securities”) plus a balancing cash component to equate the transaction to the net asset value per share of the Fund on the transaction date. Cash may also be substituted in an amount equivalent to the value of certain Deposit Securities, generally as a result of market circumstances, or when the securities are not available in sufficient quantity for delivery or are not eligible for trading by the Authorized Participant. The Funds may issue Creation Units in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit at the Custodian for the benefit of the Funds, collateral consisting of cash in the form of U.S. dollars at least equal to 115% of the daily marked to market value of the missing Deposit Securities.

 

Authorized Participants purchasing and redeeming Creation Units may pay transaction fees directly to The Bank of New York Mellon. In addition, the Funds may impose certain variable fees for creations and redemptions with respect to transactions in Creation Units for cash, or on transactions effected outside the clearing process, which are treated as increases in capital. These variable fees, if any, are reflected in share transactions in the Statements of Changes in Net Assets.

 

For the period ended March 31, 2018, the Funds had in-kind contributions and redemptions as follows:

 

Fund		In-Kind Contributions				In-Kind Redemptions
Biotech ETF		$	32,368,213			$	247,868,615
Environmental Services ETF			4,289,265				—
Gaming ETF			30,073,511				4,417,017
Pharmaceutical ETF			319,515,272				359,084,634
Retail ETF			45,894,807				44,900,506
Semiconductor ETF			7,666,956,464				7,497,866,780

 

The in-kind contributions and in-kind redemptions in this table represent the accumulation of each Fund’s daily net shareholder transactions including rebalancing activity, while the Statements of Changes in Net Assets reflect gross shareholder transactions including any cash component of the transactions.

 

Note 7—Concentration of Risk—The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index, as indicated in the name of each Fund. The Adviser uses a “passive” or index approach to achieve each Fund’s investment objective by investing in a portfolio of securities that generally replicates the Fund’s index. Each of the Funds is classified as a non-diversified fund under the 1940 Act. Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrences affecting these issuers. The Funds may purchase securities on foreign exchanges. Securities of foreign issuers involve special risks and considerations not typically associated with investing in U.S. issuers. These risks include devaluation of currencies, currency controls, less reliable information about issuers, different securities transaction clearance and settlement practices, future adverse political and economic developments and local/regional conflicts. These risks are heightened for investments in emerging market countries. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of comparable U.S. issuers.

 

In March 2017, the United Kingdom triggered Article 50, and is now scheduled to leave the European Union (“EU”) by the end of March 2019. Significant uncertainty exists on how the withdrawal will take place, the terms of the withdrawal

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

 

and the effects such withdrawal will have on the EU and the United Kingdom. This may further impact the value of the Euro and the British pound sterling, and has caused volatility and uncertainty in European and global markets.

 

A more complete description of risks is included in each Fund’s Prospectus and Statement of Additional Information.

 

Note 8—Trustee Deferred Compensation Plan—The Trust has a Deferred Compensation Plan (the “Plan”) for Trustees under which the Trustees can elect to defer receipt of their trustee fees until retirement, disability or termination from the Board of Trustees. The fees otherwise payable to the participating Trustees are deemed invested in shares of the Funds as directed by the Trustees.

 

The expense for the Plan is included in “Trustees’ fees and expenses” in the Statements of Operations. The liability for the Plan is shown as “Deferred Trustee fees” in the Statements of Assets and Liabilities.

 

Note 9—Securities Lending—To generate additional income, each of the Funds may lend its securities pursuant to a securities lending agreement with The Bank of New York Mellon, the securities lending agent and also the Funds’ custodian. Each Fund may lend up to 33% of its investments requiring that the loan be continuously collateralized by cash, U.S. government or U.S. government agency securities, shares of an investment trust or mutual fund, or any combination of cash and such securities at all times equal to at least 102% (105% for foreign securities) of the market value plus accrued interest on the securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled on the next business day. During the term of the loan, the Funds will continue to receive any dividends, interest or amounts equivalent thereto on the securities loaned, while receiving a fee from the borrower and/or earning interest on the investment of the cash collateral. Such fees and interest are shared with the securities lending agent under the terms of the securities lending agreement. The Funds may pay reasonable finders’, administrative and custodial fees in connection with a loan of its securities. Securities lending income is disclosed as such in the Statements of Operations. The collateral for securities loaned is recognized in the Schedules of Investments and the Statements of Assets and Liabilities. The cash collateral is maintained on the Funds’ behalf by the lending agent and is invested in repurchase agreements collateralized by obligations of the U.S. Treasury and/or Government Agencies. Loans are subject to termination at the option of the borrower or the Funds. Upon termination of the loan, the borrower will return to the lender securities identical to the securities loaned. The Funds bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The value of loaned securities and related collateral outstanding at March 31, 2018 are presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities.

 

The following table presents repurchase agreements held as collateral by type of security on loan pledged as of March 31, 2018:

 

		Gross Amount of Recognized Liabilities for Securities Loaned in the Statements of Assets and Liabilities*
Fund		Equity Securities
Biotech ETF			1,542,625
Environmental Services ETF			1,704,843
Gaming ETF			2,239,962
Generic Drugs ETF			170,345
Pharmaceutical ETF			28,827,206
Semiconductor ETF			29,090,395

 

*	Remaining contractual maturity of the agreements: overnight and continuous

 

 

Note 10—Bank Line of Credit—The Funds may participate in a $200 million committed credit facility (the “Facility”) to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of the Funds and other temporary or emergency purposes. The Funds have agreed to pay commitment fees, pro rata, based on the unused but available balance. Interest is charged to the Funds at rates based on prevailing market rates in effect at the time of borrowings. During the period ended March 31, 2018, the following Funds borrowed under this Facility:

 

Fund		Days Outstanding				Average Daily Loan Balance				Average Interest Rate				Outstanding Loan Balance as of March 31, 2018
Biotech ETF			54			$	1,216,810				2.69	%		$	455,842
Gaming ETF			52				154,834				2.87				146,004
Pharmaceutical ETF			127				696,070				2.68				—
Retail ETF			52				133,110				2.69				72,801
Semiconductor ETF			147				1,991,734				2.69				—

 

Note 11—Custodian Fees—The Funds have entered into an expense offset agreement with the custodian wherein they receive a credit toward the reduction of custodian fees whenever there are uninvested cash balances. The Funds could have invested their cash balances elsewhere if they had not agreed to a reduction in fees under the expense offset agreement with the custodian. For the period ended March 31, 2018, there were offsets to custodian fees and these amounts are reflected in custody expense in the Statements of Operations.

 

Note 12—Subsequent Events—The Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.

 

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by a VanEck Vectors ETF Trust (the “Trust”) Prospectus, which includes more complete information. An investor should consider the investment objective, risks, and charges and expenses of the Funds carefully before investing. The prospectus contains this and other information about the investment company. Please read the 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-Q. The Trust’s Form N-Qs are available on the Commission’s website at http://www.sec.gov and may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 202.942.8090. The Funds’ complete schedules of portfolio holdings are also available by calling 800.826.2333 or by visiting vaneck.com.

 

 

Investment Adviser:	Van Eck Associates Corporation
Distributor:	Van Eck Securities Corporation 666 Third Avenue, New York, NY 10017 vaneck.com
Account Assistance:	800.826.2333	INDUSSAR

SEMI-ANNUAL REPORT March 31, 2018 (unaudited)

 

VANECK VECTORS®
Morningstar International Moat ETF	MOTI®
Morningstar Wide Moat ETF	MOAT®
NDR CMG Long/Flat Allocation ETF	LFEQTM
Spin-Off ETF	SPUN®

 

	800.826.2333	vaneck.com

 

 

President’s Letter	1
Management Discussion	4
Explanation of Expenses	5
Schedule of Investments
Morningstar International Moat ETF	6
Morningstar Wide Moat ETF	9
NDR CMG Long/Flat Allocation ETF	11
Spin-Off ETF	12
Statements of Assets and Liabilities
Morningstar International Moat ETF	16
Morningstar Wide Moat ETF	16
NDR CMG Long/Flat Allocation ETF	16
Spin-Off ETF	16
Statements of Operations
Morningstar International Moat ETF	17
Morningstar Wide Moat ETF	17
NDR CMG Long/Flat Allocation ETF	17
Spin-Off ETF	17
Statements of Changes in Net Assets
Morningstar International Moat ETF	18
Morningstar Wide Moat ETF	18
NDR CMG Long/Flat Allocation ETF	19
Spin-Off ETF	19
Financial Highlights
Morningstar International Moat ETF	20
Morningstar Wide Moat ETF	20
NDR CMG Long/Flat Allocation ETF	21
Spin-Off ETF	21
Notes to Financial Statements	22
Approval of Investment Management Agreement	29

 

The information contained in the management discussion represents the opinions of VanEck Vectors ETF Trust and may differ from other persons. This information is not intended to be a forecast of future events, a guarantee of future results or investment advice. 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 and the Funds’ performance, and the views of VanEck Vectors ETF Trust are as of March 31, 2018, and are subject to change.

VANECK VECTORS ETFs

March 31, 2018 (unaudited)

 

Dear Shareholder:

 

We are pleased to present this semi-annual report for the six-month period ended March 31, 2018. Our three strategic equity exchange-traded funds (ETFs) of the VanEck Vectors^® ETF Trust are now joined by the first of our guided allocation ETFs—VanEck Vectors NDR CMG Long/Flat Allocation ETF (NYSE Arca: LFEQ).

 

Managing Risk in the U.S. Equity Market

 

Building on our existing relationship with Ned Davis Research (NDR), the world-renowned provider of institutional quality research, we launched a new ETF with a guided allocation approach aimed at helping investors manage risk in the U.S. equity market.

 

Launched on October 4, 2017, LFEQ is designed to guide investors through volatile markets by opportunistically allocating between U.S. equity and cash. While many investors make an allocation to U.S. equity for the long-term growth potential, most probably do not realize that since 1928 the S&P 500^® Index¹ has spent approximately 70% of the time either in a bear market or recovering from one.² This leaves the balance of time, only about 30%, available for the opportunity to generate new wealth.

 

Equity Markets Spent 70% of the Time in Market Decline and Recovery Periods 1/3/1928 - 3/31/2018

 

 

Source: Ned Davis Research, FactSet, S&P Dow Jones Indices. Based on price return, which excludes dividends. If calculated on a total return basis the figure would be 59%. Data as of 3/31/2018. Data plotted to logarithmic scale. For illustrative purposes only. Past performance is no guarantee of future results. See disclosures and index descriptions and definitions below.

 

For any investor, that is not a great deal of time spent growing new wealth. However, an investor’s experience will depend on where in the market cycle she or he starts investing. LFEQ provides investors with an ETF solution that offers a systematic approach that seeks both to participate in uptrends with a full allocation to equity and preserve capital by raising cash as market health weakens.

 

LFEQ seeks to track the Ned Davis Research CMG US Large Cap Long/Flat Index³ (NDRCMGLF). This is a rules-based index that follows a proprietary model developed by NDR and CMG Capital Management Group, Inc. The model produces trade signals that dictate the index’s equity allocation (100%, 80%, 40%, or 0%) and/or cash (U.S. T-bills) allocation.

VANECK VECTORS ETFs

(unaudited) (continued)

 

Second Partnership with Ned Davis Research

 

LFEQ is the second partnership between VanEck and Ned Davis Research, joining the VanEck^® NDR Managed Allocation Fund (NDRMX), a tactical allocation mutual fund launched in May 2016. NDRMX follows a flexible NDR model allocating between U.S. and non-U.S. equity, U.S. debt, and U.S. cash and cash equivalents.

 

Access investment and market insights from VanEck’s investment professionals by subscribing to our blogs. To subscribe to the guided allocation updates, please contact us at 800.826.2333 or visit vaneck.com/subscription to register.

 

Thank you for participating in the VanEck Vectors ETF Trust. On the following pages, you will find the performance record of each of the funds for the six-month period ending March 31, 2018. You will also find their financial statements. We value your continuing confidence in us and look forward to helping you meet your investment goals in the future.

 

 

 

Jan F. van Eck
Trustee and President
VanEck Vectors ETF Trust

 

April 16, 2018

 

Represents the opinions of the investment adviser. Past performance is no guarantee of future results. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue.

 

1	S&P 500® Index consists of 500 widely held common stocks covering the leading industries in the U.S. economy.
2	Source: Ned Davis Research, S&P Dow Jones Indices. Based on price return, which excludes dividends. If calculated on a total return basis the figure would be 59%. Data as of 3/31/2018. Past performance is not indicative of future correlation or results.
3	Ned Davis Research CMG US Large Cap Long/Flat Index (NDRCMGLF) is a rules-based index that follows a proprietary model developed by Ned Davis Research, Inc. (“NDR”) in conjunction with CMG Capital Management Group, Inc. (“CMG”). The model produces daily trade signals to determine the Index’s equity allocation percentage (100%, 80%, 40%, or 0%). When allocated to a percentage of equities (long), that portion of the Index will comprise the S&P 500® Index. When allocated to a percentage of cash (flat), that portion of the Index will be allocated to the Solactive13-week U.S. T-bill Index.

 

Index returns are not Fund returns and do not reflect any management fees or brokerage expenses. Certain indices may take into account withholding taxes. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses. Index returns assume that dividends have been reinvested.

 

VanEck Vectors NDR CMG Long/Flat Allocation ETF (the “Fund”) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Ned Davis Research CMG US Large Cap Long/Flat Index (the “Index”).

 

The Fund is not sponsored, endorsed, sold or promoted by Ned Davis Research, Inc. or CMG Capital Management Group, Inc. NDR and CMG make no representation or warranty, express or implied, to the owners of the Fund or any member of the public regarding the advisability of investing in securities generally or in the Fund particularly or the ability of the Index to track the performance of equities market.

 

NEITHER NDR NOR CMG GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN AND NEITHER NDR NOR CMG SHALL HAVE ANY LIABILITY WHATSOEVER FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. NDR AND CMG MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN. NDR AND CMG MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL NDR OR CMG HAVE ANY LIABILITY, JOINTLY OR SEVERALLY, FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

 

 

The S&P 500 Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Van Eck Associates Corporation. Copyright © 2018 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spdji.com. S&P^® is a registered trademark of S&P Global and Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.

VANECK VECTORS ETFs

(unaudited)

 

Management Discussion (unaudited)

 

All three VanEck Vectors Strategic Equity ETFs that traded for the full six-month period posted positive returns. Since VanEck Vectors NDR CMG Long/Flat Allocation ETF (LFEQ) was launched on October 4, 2017, it did not trade for the full reporting period.

 

 

Source: VanEck. Returns based on NAV. The performance data quoted represent past performance. Past performance is not a guarantee of future results. Performance information for the Funds reflects temporary waivers of expenses and/or fees. Had the Funds incurred all expenses, investment returns would have been reduced. Investment return and value of the shares of the Funds will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted.

 

Morningstar International Moat

 

For the six-month period, VanEck Vectors Morningstar International Moat ETF (NYSE Arca: MOTI) returned 1.87%.* The primary drivers of the Fund’s performance were the financials and consumer discretionary sectors. The healthcare sector detracted most from performance followed by the energy and materials sectors.

 

Morningstar Wide Moat

 

VanEck Vectors Morningstar Wide Moat ETF (NYSE Arca: MOAT) returned 3.83%* for the six-month period. The primary driver of performance was the Fund’s exposure to the consumer discretionary sector. In addition, stocks in the information technology and financials sectors contributed solid positive returns. The health care sector was the single largest detractor from the Fund’s performance.

 

NDR CMG Long/Flat Allocation

 

Since inception on October 4, 2017, the Fund had traded for under six months by March 31, 2018. The Fund was up 4.11%.* The Fund’s allocation to equities changed twice during the period. In light of deteriorating market health, the Fund’s exposure to equites was reduced from 100% to 80% on November 22, 2017. However, on December 27, 2017, reacting quickly to increasing market health, the Fund’s allocation to equities returned to 100%, at which level it remained through the end of the period under review.

 

Spin-Off

 

VanEck Vectors Spin-Off ETF (NYSE Arca: SPUN) returned 2.79%.* During the six-month period, U.S. companies were by far the largest contributors to the Fund’s total returns. Ireland and the Cayman Islands were the largest detractors from performance. The three sectors contributing the most to performance were information technology, consumer discretionary, and materials. The energy, real estate, and utilities sectors were the only negative contributors to the Fund’s performance.

 

*	Returns based on NAV.

VANECK VECTORS ETF TRUST

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, October 1, 2017 to March 31, 2018.

 

Actual Expenses

The first line in the table below provides information about account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”

 

Hypothetical Example for Comparison Purposes

The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

		Beginning Account Value October 1, 2017				Ending Account Value March 31, 2018				Annualized Expense Ratio During Period				Expenses Paid During the Period* October 1, 2017 – March 31, 2018
Morningstar International Moat ETF
Actual		$	1,000.00			$	1,018.70				0.57	%		$	2.87
Hypothetical**		$	1,000.00			$	1,022.09				0.57	%		$	2.87
Morningstar Wide Moat ETF
Actual		$	1,000.00			$	1,038.30				0.48	%		$	2.44
Hypothetical**		$	1,000.00			$	1,022.54				0.48	%		$	2.42
NDR CMG Long/Flat Allocation ETF***
Actual		$	1,000.00			$	1,041.10				0.55	%		$	2.74
Hypothetical**		$	1,000.00			$	1,022.19				0.55	%		$	2.77
Spin-Off ETF
Actual		$	1,000.00			$	1,027.90				0.55	%		$	2.78
Hypothetical**		$	1,000.00			$	1,022.19				0.55	%		$	2.77

 

*	Expenses are equal to the Fund’s annualized expense ratio (for the six months ended March 31, 2018) multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year divided by the number of days in the fiscal year (to reflect the one-half year period).
**	Assumes annual return of 5% before expenses
***	Expenses are equal to the Fund’s annualized expense ratio (for the period from October 4, 2017 (commencement of operations) to March 31, 2018), multiplied by the average account value over the period, multiplied by the number of days since commencement of operations divided by the number of days in the fiscal year.

VANECK VECTORS MORNINGSTAR INTERNATIONAL MOAT ETF

SCHEDULE OF INVESTMENTS

March 31, 2018 (unaudited)

 

 

See Notes to Financial Statements

 

 

 

 

Definitions:

HKD	Hong Kong Dollar
SEK	Swedish Krona
USD	United States Dollar

Footnotes:

*	Non-income producing
#	Indicates a fair valued security which has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $92,620,367 which represents 90.4% of net assets.

 

Summary of Investments by Sector		% of Investments				Value
Consumer Discretionary			7.8	%		$	8,010,313
Consumer Staples			4.2				4,328,838
Energy			0.9				894,344
Financials			17.5				17,933,451
Health Care			6.5				6,687,434
Industrials			23.7				24,373,190
Information Technology			5.3				5,410,553
Materials			4.0				4,079,309
Real Estate			9.2				9,416,718
Telecommunication Services			15.8				16,225,116
Utilities			5.1				5,280,194
			100.0	%		$	102,639,460

 

See Notes to Financial Statements

VANECK VECTORS MORNINGSTAR INTERNATIONAL MOAT ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

The summary of inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Common Stocks
Australia		$	—			$	4,060,071				$	—			$	4,060,071
Belgium			—				1,037,910					—				1,037,910
Canada			3,871,833				—					—				3,871,833
China / Hong Kong			978,887				15,691,522					—				16,670,409
Denmark			—				984,368					—				984,368
France			—				2,892,337					—				2,892,337
Germany			—				12,055,682					—				12,055,682
India			—				2,163,263					—				2,163,263
Italy			—				2,095,991					—				2,095,991
Japan			—				12,364,389					—				12,364,389
Luxembourg			—				2,170,818					—				2,170,818
Mexico			5,168,373				—					—				5,168,373
Netherlands			—				2,987,726					—				2,987,726
New Zealand			—				977,009					—				977,009
Russia			—				1,055,437					—				1,055,437
Singapore			—				4,218,442					—				4,218,442
South Korea			—				1,047,104					—				1,047,104
Spain			—				5,217,886					—				5,217,886
Sweden			—				3,666,276					—				3,666,276
Switzerland			—				2,022,865					—				2,022,865
United Kingdom			—				11,538,478					—				11,538,478
United States			—				2,187,156					—				2,187,156
Real Estate Investment Trusts*			—				2,185,637					—				2,185,637
Total		$	10,019,093			$	92,620,367				$	—			$	102,639,460

 

* See Schedule of Investments for geographic sector breakouts.

 

During the period ended March 31, 2018, transfers of securities from Level 2 to Level 1 were $3,019,905. These transfers resulted primarily from changes in certain foreign securities valuation methodologies between the last close of the securities’ primary market (Level 1) and valuation by a pricing service (Level 2), which takes into account market direction or events occurring before the Fund’s pricing time but after the last local close, as described in the Notes to Financial Statements.

 

See Notes to Financial Statements

VANECK VECTORS MORNINGSTAR WIDE MOAT ETF

SCHEDULE OF INVESTMENTS

March 31, 2018 (unaudited)

 

 

See Notes to Financial Statements

VANECK VECTORS MORNINGSTAR WIDE MOAT ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

 

Footnotes:

*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $31,807,762.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned		% of Investments				Value
Consumer Discretionary			22.7	%		$	310,236,355
Consumer Staples			11.2				153,196,867
Energy			1.3				17,649,564
Financials			5.9				81,082,686
Health Care			33.5				456,517,108
Industrials			8.2				111,468,815
Information Technology			11.2				152,951,928
Materials			4.8				65,592,608
Utilities			1.2				16,510,708
			100.0	%		$	1,365,206,639

 

The summary of inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Common Stocks*		$	1,365,206,639			$	—				$	—			$	1,365,206,639
Repurchase Agreements			—				31,824,681					—				31,824,681
Total		$	1,365,206,639			$	31,824,681				$	—			$	1,397,031,320

 

* See Schedule of Investments for industry sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2018.

 

See Notes to Financial Statements

VANECK VECTORS NDR CMG LONG/FLAT ALLOCATION ETF

SCHEDULE OF INVESTMENTS

March 31, 2018 (unaudited)

 

Number
of Shares						Value
EXCHANGE TRADED FUND: 99.6% (Cost: $35,705,043)
	144,280			Vanguard S&P 500 ETF		$	34,927,302
MONEY MARKET FUND: 0.5% (Cost: $160,096)
	160,096			Dreyfus Government Cash Management Fund – Institutional Shares			160,096
Total Investments: 100.1% (Cost: $35,865,139)							35,087,398
Liabilities in excess of other assets: (0.1)%							(35,188	)
NET ASSETS: 100.0%						$	35,052,210

 

Summary of Investments by Sector		% of Investments				Value
Exchange Traded Fund			99.5	%		$	34,927,302
Money Market Fund			0.5				160,096
			100.0	%		$	35,087,398

 

The summary of inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Exchange Traded Fund		$	34,927,302			$	—				$	—			$	34,927,302
Money Market Fund			160,096				—					—				160,096
Total		$	35,087,398			$	—				$	—			$	35,087,398

 

There were no transfers between levels during the period ended March 31, 2018.

 

See Notes to Financial Statements

VANECK VECTORS SPIN-OFF ETF

SCHEDULE OF INVESTMENTS

March 31, 2018 (unaudited)

 

 

See Notes to Financial Statements

 

 

 

 

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 $904,903.
#	Indicates a fair valued security which has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $1,024,092 which represents 21.5% of net assets.
Reg S	Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned		% of Investments				Value
Consumer Discretionary			18.5	%		$	887,531
Consumer Staples			3.4				164,441
Energy			5.4				259,055
Financials			7.6				365,123
Health Care			7.4				354,721
Industrials			15.9				763,598
Information Technology			10.8				517,036
Materials			10.9				521,591
Real Estate			17.4				837,445
Utilities			2.2				106,359
Money Market Fund			0.5				21,887
			100.0	%		$	4,798,787

 

See Notes to Financial Statements

VANECK VECTORS SPIN-OFF ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

The summary of inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Common Stocks
Australia		$	—			$	102,319				$	—			$	102,319
Cayman Islands			45,760				—					—				45,760
China / Hong Kong			—				197,056					—				197,056
Denmark			—				51,075					—				51,075
Finland			—				102,194					—				102,194
France			—				53,911					—				53,911
Germany			—				99,467					—				99,467
Ireland			52,624				—					—				52,624
Italy			—				53,609					—				53,609
Norway			—				50,245					—				50,245
Singapore			—				53,319					—				53,319
Sweden			—				158,307					—				158,307
Switzerland			—				50,819					—				50,819
United Kingdom			110,632				51,771					—				162,403
United States			2,857,178				—					—				2,857,178
Real Estate Investment Trusts*			686,614				—					—				686,614
Money Market Fund			21,887				—					—				21,887
Repurchase Agreement			—				909,458					—				909,458
Total		$	3,774,695			$	1,933,550				$	—			$	5,708,245

 

* See Schedule of Investments for geographic sector breakouts.

 

During the period ended March 31, 2018, transfers of securities from Level 1 to Level 2 were $329,139, transfers of securities from Level 2 to Level 1 were $56,353. These transfers resulted primarily from changes in certain foreign securities valuation methodologies between the last close of the securities’ primary market (Level 1) and valuation by a pricing service (Level 2), which takes into account market direction or events occurring before the Fund’s pricing time but after the last local close, as described in the Notes to Financial Statements.

 

See Notes to Financial Statements

[This Page Intentionally Left Blank.]

VANECK VECTORS ETF TRUST

STATEMENTS OF ASSETS AND LIABILITIES

March 31, 2018 (unaudited)

 

					Morningstar International Moat ETF				Morningstar Wide Moat ETF				NDR CMG Long/Flat Allocation ETF				Spin-Off ETF
Assets:
Investments, at value (1) (2)					$	102,639,460			$	1,365,206,639			$	35,087,398			$	4,798,787
Short-term investments held as collateral for securities loaned (3)						—				31,824,681				—				909,458
Cash						—				1,189,309				—				124
Cash denominated in foreign currency, at value (4)						197,712				—				—				—
Receivables:
		Investment securities sold				179,277				—				—				641,252
		Shares sold				—				1,360				394				—
		Due from Adviser				—				—				—				6,539
		Dividends and interest				293,714				3,347,371				60				14,304
Prepaid expenses						393				9,761				—				45
		Total assets				103,310,556				1,401,579,121				35,087,852				6,370,509
Liabilities:
Payables:
		Investment securities purchased				177,940				—				—				656,324
		Collateral for securities loaned				—				31,824,681				—				909,458
		Line of credit				635,888				—				—				—
		Shares redeemed				—				453				—				—
		Due to Adviser				36,153				546,058				6,501				—
		Due to custodian				3,306				—				—				—
Deferred Trustee fees						221				34,984				2				30
Accrued expenses						35,292				44,755				29,139				35,436
		Total liabilities				888,800				32,450,931				35,642				1,601,248
NET ASSETS					$	102,421,756			$	1,369,128,190			$	35,052,210			$	4,769,261
Shares outstanding						3,000,000				33,050,000				1,350,000				200,000
Net asset value, redemption and offering price per share					$	34.14			$	41.43			$	25.96			$	23.85
Net assets consist of:
		Aggregate paid in capital			$	96,047,076			$	1,395,527,036			$	35,599,216			$	3,827,475
		Net unrealized appreciation (depreciation)				3,035,154				18,291,269				(777,741	)			479,996
		Undistributed (accumulated) net investment income (loss)				(107,753	)			8,951,607				90,244				14,819
		Accumulated net realized gain (loss)				3,447,279				(53,641,722	)			140,491				446,971
					$	102,421,756			$	1,369,128,190			$	35,052,210			$	4,769,261
(1)		Value of securities on loan			$	—			$	31,807,762			$	—			$	904,903
(2)		Cost of investments			$	99,606,006			$	1,346,915,369			$	35,865,139			$	4,318,790
(3)		Cost of short-term investments held as collateral for securities loaned			$	—			$	31,824,681			$	—			$	909,458
(4)		Cost of cash denominated in foreign currency			$	198,149			$	—			$	—			$	—

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF OPERATIONS

For the Six Months Ended March 31, 2018 (unaudited)

 

		Morningstar International Moat ETF				Morningstar Wide Moat ETF				NDR CMG Long/Flat Allocation ETF (a)				Spin-Off ETF
Income:
Dividends		$	1,097,221			$	13,999,117			$	142,114			$	44,865
Interest			—				—				920				—
Securities lending income			19,889				107,106				—				1,339
Foreign taxes withheld			(123,694	)			—				—				(1,098	)
Total income			993,416				14,106,223				143,034				45,106
Expenses:
Management fees			217,280				3,036,720				29,809				13,383
Professional fees			29,914				50,801				22,704				30,303
Insurance			304				6,213				—				29
Trustees’ fees and expenses			628				14,742				23				61
Reports to shareholders			17,465				36,354				7,228				7,082
Indicative optimized portfolio value fee			2,528				2,432				2,158				2,514
Custodian fees			12,846				15,388				4,335				5,528
Registration fees			2,518				9,201				2,479				2,552
Transfer agent fees			1,210				1,101				1,188				1,212
Fund accounting fees			4,474				23,782				1,282				650
Interest			3,115				20,543				—				—
Other			2,946				16,050				1,331				3,037
Total expenses			295,228				3,233,327				72,537				66,351
Waiver of management fees			(48,760	)			—				(29,809	)			(13,383	)
Expenses assumed by the Adviser			—				—				(9,938	)			(38,247	)
Net expenses			246,468				3,233,327				32,790				14,721
Net investment income			746,948				10,872,896				110,244				30,385
Net realized gain (loss) on:
Investments			1,962,729				10,702,440				8,365				189,409
In-kind redemptions			1,519,103				70,449,341				132,126				322,707
Foreign currency transactions and foreign denominated assets and liabilities			(8,268	)			—				—				(122	)
Net realized gain			3,473,564				81,151,781				140,491				511,994
Net change in unrealized appreciation (depreciation) on:
Investments			(3,371,615	)			(49,482,221	)			(777,741	)			(369,354	)
Foreign currency transactions and foreign denominated assets and liabilities			898				—				—				(24	)
Net change in unrealized appreciation (depreciation)			(3,370,717	)			(49,482,221	)			(777,741	)			(369,378	)
Net Increase (Decrease) in Net Assets Resulting from Operations		$	849,795			$	42,542,456			$	(527,006	)		$	173,001

 

(a)	For the period October 4, 2017 (commencement of operations) through March 31, 2018.

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

		Morningstar International Moat ETF								Morningstar Wide Moat ETF
		For the Six Months Ended March 31, 2018				For the Year Ended September 30, 2017				For the Six Months Ended March 31, 2018				For the Year Ended September 30, 2017
		(unaudited)								(unaudited)
Operations:
Net investment income		$	746,948			$	1,232,784			$	10,872,896			$	14,690,691
Net realized gain			3,473,564				3,732,310				81,151,781				123,090,627
Net change in unrealized appreciation (depreciation)			(3,370,717	)			5,937,074				(49,482,221	)			40,676,068
Net increase in net assets resulting from operations			849,795				10,902,168				42,542,456				178,457,386
Dividends and Distributions to shareholders:
Dividends from net investment income			(2,100,550	)			(407,000	)			(14,227,200	)			(9,710,400	)
Distributions from net realized capital gains			(2,201,600	)			—				—				—
Total Dividends and Distributions			(4,302,150	)			(407,000	)			(14,227,200	)			(9,710,400	)
Share transactions:**
Proceeds from sale of shares			34,846,745				58,380,932				341,806,753				698,870,832
Cost of shares redeemed			(10,603,645	)			—				(287,444,739	)			(334,524,711	)
Increase in net assets resulting from share transactions			24,243,100				58,380,932				54,362,014				364,346,121
Total increase in net assets			20,790,745				68,876,100				82,677,270				533,093,107
Net Assets, beginning of period			81,631,011				12,754,911				1,286,450,920				753,357,813
Net Assets, end of period†		$	102,421,756			$	81,631,011			$	1,369,128,190			$	1,286,450,920
† Including undistributed (accumulated) net investment income (loss)		$	(107,753	)		$	1,245,849			$	8,951,607			$	12,305,911
** Shares of Common Stock Issued (no par value)
Shares sold			1,000,000				1,850,000				7,850,000				18,300,000
Shares redeemed			(300,000	)			—				(6,700,000	)			(8,550,000	)
Net increase			700,000				1,850,000				1,150,000				9,750,000

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

		NDR CMG Long/Flat Allocation ETF				Spin-Off ETF
		For the Period October 4, 2017* through March 31, 2018				For the Six Months Ended March 31, 2018				For the Year Ended September 30, 2017
		(unaudited)				(unaudited)
Operations:
Net investment income		$	110,244			$	30,385			$	44,880
Net realized gain (loss)			140,491				511,994				(35,954	)
Net change in unrealized appreciation (depreciation)			(777,741	)			(369,378	)			572,438
Net increase (decrease) in net assets resulting from operations			(527,006	)			173,001				581,364
Dividends and Distributions to shareholders:
Dividends from net investment income			(20,000	)			(56,000	)			(48,600	)
Share transactions:**
Proceeds from sale of shares			38,224,281				—				2,202,041
Cost of shares redeemed			(2,625,065	)			(1,201,543	)			—
Increase (Decrease) in net assets resulting from share transactions			35,599,216				(1,201,543	)			2,202,041
Total increase (decrease) in net assets			35,052,210				(1,084,542	)			2,734,805
Net Assets, beginning of period			—				5,853,803				3,118,998
Net Assets, end of period†		$	35,052,210			$	4,769,261			$	5,853,803
† Including undistributed net investment income		$	90,244			$	14,819			$	40,434
** Shares of Common Stock Issued (no par value)
Shares sold			1,450,001				—				100,000
Shares redeemed			(100,001	)			(50,000	)			—
Net increase (decrease)			1,350,000				(50,000	)			100,000

 

*	Commencement of operations

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		Morningstar International Moat ETF
		For the Six Months Ended March 31,					For the Year Ended September 30,										For the Period July 13, 2015 (a) through September 30,
		2018						2017					2016					2015
		(unaudited)
Net asset value, beginning of period			$	35.49				$	28.34				$	26.48				$	30.17
Income from investment operations:
Net investment income				0.30	(b)				0.93	(b)				0.76					0.18
Net realized and unrealized gain (loss) on investments				0.35					6.59					1.33					(3.87	)
Total from investment operations				0.65					7.52					2.09					(3.69	)
Less:
Dividends from net investment income				(0.98	)				(0.37	)				(0.23	)				—
Distributions from net realized capital gains				(1.02	)				—					—					—
Total dividends and distributions				(2.00	)				(0.37	)				(0.23	)				—
Net asset value, end of period			$	34.14				$	35.49				$	28.34				$	26.48
Total return (c)				1.87	%(d)				26.91	%				7.91	%			(12.23		)%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$102,422					$81,631					$12,755					$10,591
Ratio of gross expenses to average net assets				0.68	%(e)				0.84	%				1.62	%				2.49	%(e)
Ratio of net expenses to average net assets				0.57	%(e)				0.56	%				0.56	%				0.56	%(e)
Ratio of net expenses to average net assets excluding interest expense				0.56	%(e)				0.56	%				0.56	%				0.56	%(e)
Ratio of net investment income to average net assets				1.72	%(e)				2.92	%				2.99	%				3.27	%(e)
Portfolio turnover rate (f)				53	%(d)				129	%				168	%				54	%(d)
		Morningstar Wide Moat ETF
		For the Six
		Months Ended
		March 31,					For the Year Ended September 30,
		2018						2017					2016					2015					2014					2013
		(unaudited)
Net asset value, beginning of period			$	40.33				$	34.01				$	27.96				$	31.27				$	27.09				$	21.54
Income from investment operations:
Net investment income				0.34	(b)				0.53	(b)				0.48					0.57					0.37					0.23
Net realized and unrealized gain (loss) on investments				1.22					6.20					6.19					(3.46	)				4.04					5.46
Total from investment operations				1.56					6.73					6.67					(2.89	)				4.41					5.69
Less:
Dividends from net investment income				(0.46	)				(0.41	)				(0.62	)				(0.42	)				(0.23	)				(0.14	)
Net asset value, end of period			$	41.43				$	40.33				$	34.01				$	27.96				$	31.27				$	27.09
Total return (c)				3.83	%(d)				19.96	%				24.23	%				(9.41	)%				16.35	%				26.54	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$1,369,128					$1,286,451					$753,358					$742,364					$853,616					$364,395
Ratio of gross expenses to average net assets				0.48	%(e)				0.48	%				0.50	%				0.50	%				0.50	%				0.51	%
Ratio of net expenses to average net assets				0.48	%(e)				0.48	%				0.49	%				0.49	%				0.49	%				0.49	%
Ratio of net expenses to average net assets excluding interest expense				0.48	%(e)				0.48	%				0.49	%				0.49	%				0.49	%				0.49	%
Ratio of net investment income to average net assets				1.61	%(e)				1.42	%				1.44	%				1.88	%				1.63	%				1.48	%
Portfolio turnover rate (f)				25	%(d)				53	%				178	%				14	%				15	%				1	%

 

(a)	Commencement of operations
(b)	Calculated based upon average shares outstanding
(c)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(d)	Not Annualized
(e)	Annualized
(f)	Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions.

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		NDR CMG Long/Flat Allocation ETF
		For the Period October 4, 2017 (a) through March 31, 2018
		(unaudited)
Net asset value, beginning of period			$	25.03
Income from investment operations:
Net investment income				0.23	(b)
Net realized and unrealized gain on investments				0.80
Total from investment operations				1.03	(h)
Less:
Dividends from net investment income				(0.10	)
Net asset value, end of period			$	25.96
Total return (c)				4.11	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$35,052
Ratio of gross expenses to average net assets (g)				1.21	%(e)
Ratio of net expenses to average net assets (g)				0.55	%(e)
Ratio of net expenses to average net assets excluding interest expense (g)				0.55	%(e)
Ratio of net investment income to average net assets				1.84	%(e)
Portfolio turnover rate (f)				7	%(d)
		Spin-Off ETF
		For the Six Months Ended March 31,					For the Year Ended September 30,										For the Period June 9, 2015 (a) through September 30,
		2018					2017					2016					2015
		(unaudited)
Net asset value, beginning of period			$	23.42				$	20.79				$	16.98				$	19.78
Income from investment operations:
Net investment income				0.14	(b)				0.22	(b)				0.39					0.05
Net realized and unrealized gain (loss) on investments				0.51					2.73					3.53					(2.85	)
Total from investment operations				0.65					2.95					3.92					(2.80	)
Less:
Dividends from net investment income				(0.22	)				(0.32	)				(0.11	)				—
Net asset value, end of period			$	23.85				$	23.42				$	20.79				$	16.98
Total return (c)				2.79	%(d)				14.37	%				23.22	%			(14.16		)%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$4,769					$5,854					$3,119					$2,547
Ratio of gross expenses to average net assets				2.48	%(e)				2.66	%				5.07	%				6.24	%(e)
Ratio of net expenses to average net assets				0.55	%(e)				0.55	%				0.55	%				0.55	%(e)
Ratio of net expenses to average net assets excluding interest expense				0.55	%(e)				0.55	%				0.55	%				0.55	%(e)
Ratio of net investment income to average net assets				1.14	%(e)				0.98	%				2.13	%				1.24	%(e)
Portfolio turnover rate (f)				22	%(d)				53	%				58	%				30	%(d)

 

(a)	Commencement of operations
(b)	Calculated based upon average shares outstanding
(c)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(d)	Not Annualized
(e)	Annualized
(f)	Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions.
(g)	The ratios presented do not reflect the Fund’s proportionate share of income and expenses from the Fund’s investment in underlying funds.
(h)	The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing and repurchase of shares in relation to fluctuating market values of the investments of the Fund.

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

March 31, 2018 (unaudited)

 

Note 1—Fund Organization—VanEck Vectors ETF Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust was incorporated in Delaware as a statutory trust on March 15, 2001. The Trust operates as a series fund, and as of March 31, 2018, offers fifty-six investment portfolios, each of which represents a separate series of the Trust.

 

These financial statements relate only to the following investment portfolios: Morningstar International Moat ETF, Morningstar Wide Moat ETF, NDR CMG Long/Flat Allocation ETF, and Spin-Off ETF (formerly known as Global Spin-Off ETF), (each a “Fund” and, together, the “Funds”). Each Fund was created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the common stocks in substantially the same weighting, in an index sponsored, licensed or managed by Morningstar, Inc., Ned Davis Research, Inc. or Horizon Kinetics, LLC.

 

The Funds’ respective indices are presented below:

 

Fund		Index
Morningstar International Moat ETF		Morningstar® Global ex-US Moat Focus IndexSM(1)
Morningstar Wide Moat ETF		Morningstar® Wide Moat Focus IndexSM(1)
NDR CMG Long/Flat Allocation ETF		Ned Davis Research CMG US Large Cap Long/Flat Index(2)
Spin-Off ETF		Horizon Kinetics Global Spin-Off Index(3)

 

(1)	Published by Morningstar, Inc.
(2)	Published by Ned Davis Research, Inc.
(3)	Published by Horizon Kinetics, LLC

 

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 are following accounting and reporting requirements of Accounting Standards Codification (“ASC”) 946 Financial Services—Investment Companies.

 

The following is a summary of significant accounting policies followed by the Funds.

 

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 or traded on the NASDAQ National Market System are valued at the last sales price as reported at the close of each business day. Securities traded on the NASDAQ Stock Market are valued at the NASDAQ official closing price. Over-the-counter securities not included in the NASDAQ National Market System 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 Standard Time) but after the last close of the securities’ primary market, are fair valued using a pricing service and are categorized as Level 2 in the fair value hierarchy. The pricing service, using methods approved by the Board of Trustees, considers the correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant ADR’s and futures contracts. The Funds may also fair value securities in other situations, such as, when a particular foreign market is closed but the Fund is open. Short-term obligations with sixty days or less to maturity are valued at amortized cost, which with accrued interest approximates fair value. Money market fund investments are valued at net asset value and are considered to be Level 1 in the fair value hierarchy. The Pricing Committee of the Van Eck Associate Corporation (the “Adviser”) provides oversight of the Funds’ valuation policies and procedures, which are approved by the Funds’ Board of Trustees. Among other things, these procedures allow the Funds to utilize independent pricing services, quotations from securities dealers, and other market sources to determine fair value. The Pricing Committee convenes regularly to review the fair value of financial instruments or other assets. If market quotations for a security or other asset are not readily available, or if the Adviser believes it does not otherwise reflect the fair value of a security or asset, the security or asset will be fair valued by the Pricing Committee in accordance with the Funds’ valuation policies and procedures. The Pricing Committee employs various methods for calibrating

 

 

	the valuation approaches utilized to determine fair value, including a regular review of key inputs and assumptions, periodic comparisons to valuations provided by other independent pricing services, transactional back-testing and disposition analysis.
	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 transfers between levels of the fair value hierarchy assume the financial instruments where transferred at the beginning of the reporting period. 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, the levels used to value the Funds’ investments, and transfers between levels are located in the Schedules of Investments. Additionally, tables that reconcile the valuation of the Funds’ Level 3 investments and that present additional information about valuation methodologies and unobservable inputs, if applicable, are located in the Schedules of Investments.
B.	Federal Income Taxes—It is each Fund’s policy to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.
C.	Dividends and Distributions to Shareholders—Dividends to shareholders from net investment income and distributions from net realized capital gains, if any, are declared and paid annually by each Fund. 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. Recognized gains or losses attributable to foreign currency fluctuations on foreign currency denominated assets, other than investments, and liabilities are recorded as net realized gain (loss) on foreign currency transactions and foreign denominated assets and liabilities in the Statements of Operations.
E.	Restricted Securities—The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Fund’s Schedule of Investments.

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

F.	Repurchase Agreements—The Funds may enter into repurchase agreements with financial institutions, deemed to be creditworthy by the Adviser, to generate income from their excess cash balances and to invest securities lending cash collateral. A repurchase agreement is an agreement under which a Fund acquires securities from a seller, subject to resale to the seller at an agreed upon price and date. A Fund, through its custodian/securities lending agent, takes possession of securities collateralizing the repurchase agreement. Pursuant to the terms of the repurchase agreement, such securities must have an aggregate market value greater than or equal to the terms of the repurchase price plus accrued interest at all times. If the value of the underlying securities falls below the value of the repurchase price plus accrued interest, the Funds will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults on its repurchase obligation, the Funds maintain their right to sell the underlying securities at market value and may claim any resulting loss against the seller. Repurchase agreements held as of March 31, 2018 are reflected in the Schedules of Investments.
G.	Offsetting Assets and Liabilities—In the ordinary course of business, the Funds enter into transactions subject to enforceable master netting or other similar agreements. Generally, the right of setoff in those agreements allows the Funds to set off any exposure to a specific counterparty with any collateral received or delivered to that counterparty based on the terms of the agreements. The Funds may pledge or receive cash and/or securities as collateral for derivative instruments, securities lending and repurchase agreements. For financial reporting purposes, the Funds present securities lending and repurchase agreement assets and liabilities on a gross basis in the Statements of Assets and Liabilities. Collateral held at March 31, 2018 is presented in the Schedules of Investments. Refer to related disclosures in Note 2G (Repurchase Agreements) and 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 may record distributions received in excess of income from certain underlying investments as a reduction of cost of investments and/or as an increase in capital gains. Such amounts are based on estimates if actual amounts are not available, and actual amounts of income, realized gains and return of capital may differ from estimated amounts.
	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, 2019, to waive management fees and assume expenses to prevent each Fund’s total annual operating expenses (excluding acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses) from exceeding expense limitations listed in the table below.

 

The current management fee rate, expense limitations and the amounts waived/assumed by the Adviser for the period ended March 31, 2018, are as follows:

 

		Management				Expense
Fund		Fee Rate				Limitations
Morningstar International Moat ETF			0.50	%			0.56	%
Morningstar Wide Moat ETF			0.45				0.49
NDR CMG Long/Flat Allocation ETF			0.50				0.55
Spin-Off ETF			0.50				0.55

 

Refer to Statements of Operations for the amounts waived/assumed by the Adviser.

 

In addition, Van Eck Securities Corporation, an affiliate of the Adviser, acts as the Funds’ distributor (“the Distributor”). Certain officers and a Trustee of the Trust are officers, directors or stockholders of the Adviser and Distributor.

 

 

Note 4—Investments—For the period ended March 31, 2018, the cost of purchases and proceeds from sales of investments other than U.S. government obligations and short-term obligations (excluding in-kind transactions described in Note 6) were as follows:

 

		Cost of Investments				Proceeds from
Fund		Purchased				Investments Sold
Morningstar International Moat ETF		$	46,931,543			$	49,463,193
Morningstar Wide Moat ETF			333,849,947				340,697,462
NDR CMG Long/Flat Allocation ETF			1,011,350				1,045,799
Spin-Off ETF			1,171,925				1,204,489

 

Note 5—Income Taxes—As of March 31, 2018, for Federal income tax purposes, the identified cost, gross unrealized appreciation, gross unrealized depreciation, and net unrealized appreciation(depreciation) of investments were as follows:

 

														Net Unrealized
						Gross Unrealized				Gross Unrealized				Appreciation
Fund		Cost of Investments				Appreciation				Depreciation				(Depreciation)
Morningstar International Moat ETF		$	100,361,854			$	5,542,331			$	(3,264,725	)		$	2,277,606
Morningstar Wide Moat ETF			1,378,827,110				95,133,703				(76,929,493	)			18,204,210
NDR CMG Long/Flat Allocation ETF			35,865,139				—				(777,741	)			(777,741	)
Spin-Off ETF			5,234,939				825,693				(352,387	)			473,306

 

The tax character of dividends paid to shareholders during the year ended September 30, 2017 was as follows:

 

		2017 Dividends
Fund		Ordinary Income
Morningstar International Moat ETF		$	407,000
Morningstar Wide Moat ETF			9,710,400
Spin-Off ETF			48,600

 

The tax character of current year distributions will be determined at the end of the current year.

 

At September 30, 2017, the tax character of current year distributions will be determined at the end of the current fiscal year. The Funds had capital loss carryforwards available to offset future capital gains, as follows:

 

		Post-Effective-				Post-Effective-
		No Expiration				No Expiration
		Short-Term				Long-Term
Fund		Capital Losses				Capital Losses				Total
Morningstar Wide Moat ETF		$	(102,440,499	)		$	(32,265,944	)		$	(134,706,443	)
Spin-Off ETF			(58,333	)			—				(58,333	)

 

The Funds recognize the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by applicable tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on return filings for all open tax years. The Funds do not have exposure for additional years that might still be open in certain foreign jurisdictions. Therefore, no provision for income tax is required in the Funds’ financial statements. However, certain Funds are subject to foreign taxes on the appreciation in value of certain investments. The Funds provide for such taxes on both realized and unrealized appreciation.

 

The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the period ended March 31, 2018, the Funds did not incur any interest or penalties.

 

Note 6—Capital Share Transactions—As of March 31, 2018, there were an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Fund shares are not individually redeemable and are issued and redeemed at their net asset value per share only through certain authorized broker-dealers (“Authorized Participants”) in blocks of shares (“Creation Units”), consisting of 50,000 shares, or multiples thereof.

 

The consideration for the purchase or redemption of Creation Units of the Funds generally consists of the in-kind contribution or distribution of securities constituting the Funds’ underlying index (“Deposit Securities”) plus a balancing cash component to equate the transaction to the net asset value per share of the Fund on the transaction date. Cash may also be substituted in an amount equivalent to the value of certain Deposit Securities, generally as a result of

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

market circumstances, or when the securities are not available in sufficient quantity for delivery or are not eligible for trading by the Authorized Participant. The Funds may issue Creation Units in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit at the Custodian for the benefit of the Funds, collateral consisting of cash in the form of U.S. dollars at least equal to 115% of the daily marked to market value of the missing Deposit Securities.

 

Authorized Participants purchasing and redeeming Creation Units may pay transaction fees directly to The Bank of New York Mellon. In addition, the Funds may impose certain variable fees for creations and redemptions with respect to transactions in Creation Units for cash, or on transactions effected outside the clearing process, which are treated as increases in capital. These variable fees, if any, are reflected in share transactions in the Statements of Changes in Net Assets.

 

For the period ended March 31, 2018, the Funds had in-kind contributions and redemptions as follows:

 

Fund		In-Kind Contributions				In-Kind Redemptions
Morningstar International Moat ETF		$	33,798,551			$	10,160,351
Morningstar Wide Moat ETF			341,731,226				288,821,782
NDR CMG Long/Flat Allocation ETF			38,223,925				2,624,973
Spin-Off ETF			—				1,201,058

 

The in-kind contributions and in-kind redemptions in this table represent the accumulation of each Fund’s daily net shareholder transactions including rebalancing activity, while the Statements of Changes in Net Assets reflect shareholder transactions including any cash component of the transactions.

 

Note 7—Concentration of Risk—The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index, as indicated in the name of each Fund. The Adviser uses a “passive” or index approach to achieve each Fund’s investment objective by investing in a portfolio of securities that generally replicates the Funds’ index. Each of the Fund is classified as a non-diversified fund under the 1940 Act. Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers. The Funds may purchase securities on foreign exchanges. Securities of foreign issuers involve special risks and considerations not typically associated with investing in U.S. issuers. These risks include devaluation of currencies, currency controls, less reliable information about issuers, different securities transaction clearance and settlement practices, future adverse political and economic developments and local/regional conflicts. These risks are heightened for investments in emerging market countries. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of comparable U.S. issuers.

 

NDR CMG Long/Flat Allocation ETF may invest in shares of other funds, including ETFs that track the S&P 500 Index. As a result, the Fund will indirectly be exposed to the risks of an investment in the underlying funds. Shares of other funds have many of the same risks as direct investments in common stocks or bonds. In addition, the market value of the Fund’s shares is expected to rise and fall as the value of the underlying index or bond rises and falls. The market value of such funds’ shares may differ from the net asset value of the particular fund.

 

Spin-Off ETF may invest in companies that have been spun-off from a parent company for a number of reasons, including but not limited to low growth prospects, high capital requirements or an unfavorable capitalization structure. Investments in spun-off companies are subject to the risk that any of these characteristics will adversely affect the value of investments in the spun-off companies. There can be no assurance that a spun-off company will be financially independent or profitable, especially where the company represented a non-core or non-competitive business line of the parent company at the time of the spin-off.

 

Spin-Off ETF may invest directly in real estate investment trusts (“REITs”) and is exposed to the risk of owning real estate directly, as well as to risks that relate specifically to the way in which REITs are organized and operated. REITs generally invest directly in real estate, in mortgages or in some combination of the two. The Fund indirectly bears management expenses along with the direct expenses of the Fund. Individual REITs may own a limited number of properties and may concentrate in a particular region or property type. REITs may also be subject to heavy cash flow dependency, default by borrowers and self-liquidation.

 

 

In March 2017, the United Kingdom triggered Article 50, and is now scheduled to leave the European Union (“EU”) by the end of March 2019. Significant uncertainty exists on how the withdrawal will take place, the terms of the withdrawal and the effects such withdrawal will have on the EU and the United Kingdom. This may further impact the value of the Euro and the British pound sterling, and has caused volatility and uncertainty in European and global markets

 

As a result of events involving Ukraine and the Russian Federation, the United States and the European Union have imposed sanctions on certain Russian individuals and companies. These sanctions do not currently impact the Funds. Additional economic sanctions may be imposed or other actions may be taken that may adversely affect the value and liquidity of the Russian-related issuers held by the Funds.

 

A more complete description of risks is included in each Fund’s Prospectus and Statement of Additional Information.

 

Note 8—Trustee Deferred Compensation Plan—The Trust has a Deferred Compensation Plan (the “Plan”) for Trustees under which the Trustees can elect to defer receipt of their trustee fees until retirement, disability or termination from the Board of Trustees. The fees otherwise payable to the participating Trustees are deemed invested in shares of the Funds as directed by the Trustees.

 

The expense for the Plan is included in “Trustees’ fees and expenses” in the Statements of Operations. The liability for the Plan is shown as “Deferred Trustee fees” in the Statements of Assets and Liabilities.

 

Note 9—Securities Lending—To generate additional income, each of the Funds may lend its securities pursuant to a securities lending agreement with The Bank of New York Mellon, the securities lending agent and also the Funds’ custodian. Each Fund may lend up to 33% of its investments requiring that the loan be continuously collateralized by cash, U.S. government or U.S. government agency securities, shares of an investment trust or mutual fund, or any combination of cash and such securities at all times equal to at least 102% (105% for foreign securities) of the market value plus accrued interest on the securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled on the next business day. During the term of the loan, the Funds will continue to receive any dividends, interest or amounts equivalent thereto on the securities loaned, while receiving a fee from the borrower and/or earning interest on the investment of the cash collateral. Such fees and interest are shared with the securities lending agent under the terms of the securities lending agreement. The Funds may pay reasonable finders’, administrative and custodial fees in connection with a loan of its securities. Securities lending income is disclosed as such in the Statements of Operations. The collateral for securities loaned is recognized in the Schedules of Investments and the Statements of Assets and Liabilities. The cash collateral is maintained on the Funds’ behalf by the lending agent and is invested in repurchase agreements collateralized by obligations of the U.S. Treasury and/or Government Agencies. Loans are subject to termination at the option of the borrower or the Funds. Upon termination of the loan, the borrower will return to the lender securities identical to the securities loaned. The Funds bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The value of loaned securities and related collateral outstanding at March 31, 2018 are presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities.

 

The following table presents repurchase agreements held as collateral by type of security on loan as of March 31, 2018:

 

		Gross Amount of Recognized
		Liabilities for Securities Loaned
		in the Statements of Assets
		and Liabilities*
Fund		Equity Securities
Morningstar Wide Moat ETF		$	31,824,681
Spin-Off ETF			909,458

 

*	Remaining contractual maturity of the agreements: overnight and continuous

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

Note 10—Bank Line of Credit—The Funds may participate in a $200 million committed credit facility (the “Facility”) to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of the Funds and other temporary or emergency purposes. The Funds have agreed to pay commitment fees, pro rata, based on the unused but available balance. Interest is charged to the Funds at rates based on prevailing market rates in effect at the time of borrowings. During the year ended March 31, 2018, the following Funds borrowed under this Facility:

 

														Outstanding Loan
		Days				Average Daily				Average				Balance as of
Fund		Outstanding				Loan Balance				Interest Rate				March 31, 2018
Morningstar International Moat ETF			87			$	369,954				2.73	%		$	635,888
Morningstar Wide Moat ETF			145				1,942,211				2.68				—

 

Note 11—Custodian Fees—The Funds have entered into an expense offset agreement with the custodian wherein they receive a credit toward the reduction of custodian fees whenever there are uninvested cash balances. The Funds could have invested their cash balances elsewhere if they had not agreed to a reduction in fees under the expense offset agreement with the custodian. For the period ended March 31, 2018, there were offsets to custodian fees and these amounts are reflected in custody expense in the Statements of Operations.

 

Note 12—Subsequent Event Review—The Funds have evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements were issued.

VANECK VECTORS ETF TRUST

APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT

March 31, 2018 (unaudited)

 

At a meeting held on September 7, 2017 (the “Meeting”), the Board of Trustees (the “Board”) of VanEck Vectors^® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), considered and approved an investment management agreement between the Trust and Van Eck Associates Corporation (the “Adviser”) (the “Investment Management Agreement”) with respect to the VanEck Vectors Real Asset Allocation ETF (the “Fund”).

 

The Board’s approval of the Investment Management Agreement was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.

 

In advance of the Meeting, the Trustees received materials from the Adviser, including expense information for other funds. The Adviser provided the Trustees with information regarding, among other things, the various aspects of the Fund’s proposed investment program, fee arrangements and service provider arrangements. The Independent Trustees’ consideration of the Investment Management Agreement was based, in part, on their review of information obtained through discussions with the Adviser at the Meeting regarding the management of the Fund, information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others proposed to be involved in the management and administration of the Fund. The Trustees considered the terms and scope of services that the Adviser would provide under the Investment Management Agreement, including the Adviser’s commitment to waive certain fees and/or pay expenses of the Fund to the extent necessary to prevent the operating expenses of the Fund from exceeding agreed upon limits for a period of at least one year following the effective date of their respective registration statements.

 

The Trustees considered the benefits, other than the fees under the Investment Management Agreement, that the Adviser would receive from serving as adviser to the Fund. The Trustees did not consider historical information about the cost of the services provided by the Adviser or the profitability of the Fund to the Adviser because the Fund had not yet commenced operations. In addition, because the Fund had not yet commenced operations, the Trustees could not consider the historical performance or the quality of services previously provided to the Fund by the Adviser, although they concluded that the nature, quality, and extent of the services to be provided by the Adviser were appropriate based on the Trustees’ knowledge of the Adviser and its personnel and the operations of the other series of the Trust.

 

The Independent Trustees were advised by and met in executive session with their independent counsel at the Meeting as part of their consideration of the Investment Management Agreement.

 

In voting to approve the Investment Management Agreement, the Trustees, including the Independent Trustees, concluded that the terms of the Investment Management Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded that the Investment Management Agreement is in the best interest of the Fund and the Fund’s shareholders.

 

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by a VanEck Vectors ETF Trust (the “Trust”) Prospectus, which includes more complete information. An investor should consider the investment objective, risks, and charges and expenses of the Funds carefully before investing. The prospectus contains this and other information about the investment company. Please read the 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-Q. The Trust’s Form N-Qs are available on the Commission’s website at http://www.sec.gov and may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 202.942.8090. The Funds’ complete schedules of portfolio holdings are also available by calling 800.826.2333 or by visiting vaneck.com.

 

 

 

Investment Adviser:	Van Eck Associates Corporation
Distributor:	Van Eck Securities Corporation
	666 Third Avenue, New York, NY 10017
	vaneck.com
Account Assistance:	800.826.2333	STRATSAR

Item 2. CODE OF ETHICS.

  Not applicable.

Item 3. AUDIT COMMITTEE FINANCIAL EXPERT.

  Not applicable.

Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

  Not applicable.


Item 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

     Not applicable.

Item 6. SCHEDULE OF INVESTMENTS.

     Information included in Item 1.

Item 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
        MANAGEMENT INVESTMENT COMPANIES.

     Not applicable.

Item 8. PORTFOLIO MANAGER OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

     Not applicable.

Item 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
        COMPANY AND AFFILIATED PURCHASERS.

     Not applicable.

Item 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     Not applicable.

Item 11. CONTROLS AND PROCEDURES.

(a)  The registrant's principal executive and principal financial officers, or
     persons performing similar functions, have concluded that the registrant's
     disclosure controls and procedures (as defined in Rule 30a-3(c) under the
     Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR
     270.30a-3(c)) are effective, as of a date within 90 days of the filing
     date of the report that includes the disclosure required by this paragraph,
     based on their evaluation of these controls and procedures required
     by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules
     13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934,
     as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b)  There were no changes in the registrant's internal control over financial
     reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR
     270.30a-3(d)) that occurred during the period covered by this report that has
     materially affected, or is reasonably likely to materially affect, the registrant's
     internal control over financial reporting.

Item 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT COMPANIES.

     Not applicable.

Item 13. EXHIBITS.

(a)(1) Not applicable.

(a)(2) A separate certification for each principal executive officer and
       principal financial officer of the registrant as required by Rule 30a-2(a)
       under the Act (17 CFR 270.30a-2(a)) is attached as Exhibit 99.CERT.

(b)  Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is
     furnished as Exhibit 99.906CERT.

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) VANECK VECTORS ETF TRUST

By (Signature and Title) /s/ John J. Crimmins, Treasurer & Chief Financial Officer
                         ---------------------------------------------------------
Date June 8, 2018
     ---------------

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By (Signature and Title) /s/ Jan F. van Eck, Chief Executive Officer
                        --------------------------------------------
Date June 8, 2018
     ---------------

By (Signature and Title)  /s/ John J. Crimmins, Treasurer & Chief Financial Officer
                        -----------------------------------------------------------

Date June 8, 2018
     ---------------