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, 2016

Item 1. REPORT TO SHAREHOLDERS

 

	SEMI-ANNUAL REPORT
	March 31, 2016
	(unaudited)

 

VANECK VECTORS^TM

INDUSTRY ETFs

 

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

 

 

VANECK VECTORS INDUSTRY ETFs
	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
	Performance Comparison
		Biotech ETF		6
		Environmental Services ETF		7
		Gaming ETF		8
		Generic Drugs ETF		9
		Pharmaceutical ETF		10
		Retail ETF		11
		Semiconductor ETF		12
	Explanation of Expenses			13
	Schedule of Investments
		Biotech ETF		14
		Environmental Services ETF		16
		Gaming ETF		18
		Generic Drugs ETF		20
		Pharmaceutical ETF		23
		Retail ETF		25
		Semiconductor ETF		27
	Statements of Assets and Liabilities			30
	Statements of Operations			32
	Statements of Changes in Net Assets			34
	Financial Highlights
		Biotech ETF		37
		Environmental Services ETF		37
		Gaming ETF		38
		Generic Drugs ETF		38
		Pharmaceutical ETF		39
		Retail ETF		39
		Semiconductor ETF		40
	Notes to Financial Statements			41
	Approval of Investment Management Agreement			48

 

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, 2016, and are subject to change.

VANECK VECTORS INDUSTRY ETFs

(unaudited)

 

Dear Shareholder:

 

Effective as of May 1, 2016, the Market Vectors exchange-traded funds are now known as VanEck Vectors ETFs.

 

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, 2016.

 

On January 12, we were excited to announce the launch of a new fund that has expanded further the group of healthcare-oriented ETFs. VanEck Vectors Generic Drugs ETF (NASDAQ: GNRX) is the first and only ETF to target global manufacturers of generic drugs and biosimilars—similar copies of existing, but difficult to replicate, biological drugs.

 

With rising health care costs, drug manufacturing innovation, and public support for less expensive options to brand name drugs, we believe this to be a compelling ETF. As with all our ETFs, our goal is to help investors access opportunities presented by evolving global markets. GNRX allows investment in a major trend that has the potential to redefine the pharmaceutical industry.

 

According to the Generic Pharmaceutical Association (GPhA)¹ as of December 2014, 88% of the drugs dispensed in the U.S. were generics.

 

Generic Prescriptions Dispensed in the United States

 

 

 

Source: Generic Pharmaceutical Association, December 2014. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue.

 

In the European Union (EU) the figure was 55% in 2015,² and in Japan it was 47%³ as of September 2013. Until now, however, there has not been an ETF that offered targeted exposure to the generic drug space.

 

Expiring patents on various brand name drugs and the development of biosimilars are among the main factors driving returns in the generic pharmaceuticals space. Significant investment in research and development is still required, which reduces competition, but time to market can be quicker than brand name drugs, allowing companies to price their drugs at a significant discount.

 

Between 2013 and 2018, spending on medicine is expected to increase from $1 trillion to $1.3 trillion with generics accounting for more than 50% of the growth.⁴ Much of this expected growth is forecast to come from emerging markets. As pharma-focused ETFs have typically concentrated on developed markets, GNRX’s global approach provides exposure to the full potential of the generic drugs industry.

 

We will, as always, continue to seek out and evaluate the most attractive opportunities for you as a shareholder. We encourage you to stay in touch with us through the videos, email subscriptions, and blogs available on our website (www.vaneck.com). Should you have any questions, please contact us at 800.826.2333 or visit www.vaneck.com/etfs.

VANECK VECTORS INDUSTRY ETFs

(unaudited)

 

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, 2016. 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

 

May 4, 2016

 

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	Generic Pharmaceutical Association: Generic Drug Savings in the US – Seventh Annual Edition 2015, http://www.gphaonline.org/media/wysiwyg/PDF/GPhA_Savings_Report_2015.pdf
2	European Generic and Biosimilar Medicines Association: Regulatory Efficiency Report 2015, http://www.medicinesforeurope.com/wp-content/uploads/2016/03/EGA_Regulatory_Efficiency_Report_2015_low.pdf
3	Japan Generic Medicines Association: Generic Share (%) by MHLW Drug Price Survey, http://www.jga.gr.jp/english/country-overview/genric-share-by-mhlw/
4	IMS Institute: Global Outlook for Medicines Through 2018, http://www.imshealth.com/en/thought-leadership/ims-institute/reports/global-outlook-for-medicines-through-2018

 

 

Management Discussion (unaudited)

 

Four of the six VanEck Vectors Industry ETFs realized positive performance in the six months ended March 31, 2016. VanEck Vectors Gaming ETF posted an impressive total return of 18.69%, with VanEck Vectors Semiconductor and Environmental Services ETFs not that far behind, providing total returns of 12.51% and 11.83% respectively. All three funds outperformed the S&P 500^® Index’s^‡ 8.48% gain over the same period.

 

 

 

Note: VanEck Vectors Generic Drugs ETF is not included above as it was launched on January 12, 2016.

 

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

 

Having risen erratically through fourth quarter 2015, biotech companies experienced a challenging first quarter in 2016. In January and early February, biotech stocks fell precipitously, particularly those of clinical-stage biotechs.¹ In addition, two large biotech companies, Celegene (9.5% of Fund net assets^†) and Gilead Sciences (13.3% of Fund net assets^†) both revealed less than encouraging news. The annual guidance released by Celegene was weaker than expected, and Gilead announced the appointment of a new CEO. The U.S. Food and Drug Administration (FDA) also announced the approval of a new hepatitis C therapy—potential competition for Gilead.² However, by the end of the quarter, biotech stocks were back more or less to where they were at the end of January, but still down for the six month period. While U.S. companies detracted by far the most from total return, there was a very small contribution from a company in Spain. Positive contributions to the Fund’s performance came mainly from two companies: Amgen (11.8% of Fund net assets^†) and Medivation (4.3% of Fund net assets^†). Except for three additional companies that provided positive contributions, albeit minimal, to the Fund’s overall return, all other companies detracted from performance.

 

Environmental Services

 

Historically, growth in the construction and home-building industries has benefitted environmental services companies. Benefiting in part, perhaps, from upticks in both construction³ and home-building⁴ in the U.S. in the six month period under review, the Fund returned notable performance, gaining 11.8%.* U.S. stocks accounted for the

VANECK VECTORS INDUSTRY ETFs

(unaudited)

 

vast majority of the Fund’s very healthy positive total return. However, a small positive contribution also came from the single Canadian stock in the Fund, Progressive Waste Solutions (3.8% of Fund net assets^†). In addition to having three of the top individual weightings in the Fund, three U.S. companies were the most significant contributors to positive performance. These were: Waste Connections (9.8% of Fund net assets^†), Waste Management (10.0% of Fund net assets^†), and Republic Services (9.9% of Fund net assets^†). A number of U.S. companies did detract from Fund performance, but only minimally.

 

Gaming

 

The Fund posted a very creditable rise of 18.7%* for the six month period. In Macau, the world’s biggest gaming hub, each of these months was marked by year-on-year declines in revenues. The southern Chinese territory continued to be affected by both Beijing’s anticorruption campaign and the slowdown in economic growth in China.⁵ At the end of February, the monthly revenue figures from “Games of Fortune” (as the Macau authorities⁶ describe them) in the territory appeared to bring with them a glimmer of light. While they were down again, rather than the 2%-10% expected by analysts,⁷ the decline was only 0.1%.⁸ Although the 21st consecutively monthly decline, it was by far the smallest of all the previous 20. The light was soon extinguished, when in addition to showing yet another monthly decline, revenues for March were, at -16.3%, down year-on-year considerably more than they were the previous month. Despite this, while gaming companies operating in the U.S. were the most significant contributors to the Fund’s overall performance, those in Macau provided the next largest returns from any territory. Other major contributors were companies in Australia and Malaysia. Companies in the gaming business in Canada, Greece, and South Korea were the most significant detractors from the Fund’s overall positive performance.

 

Generic Drugs

 

Launched on January 12, 2016, the Fund had traded for only a little over two and a half months by the end of the six month period under review. The Fund was launched into a challenging market environment with the controversies surrounding both Valeant Pharmaceuticals (not owned by the Fund during the period) and Turing Pharmaceuticals (not owned by the Fund during the period) at the time having a generally negative impact on the generics sector. The Fund’s performance suffered as a consequence, down -4.92%* from launch.

 

Pharmaceutical

 

Pharmaceutical stocks followed the same trajectory as biotechnology stocks during the six month period. Having also risen erratically through the fourth quarter of 2015, pharmaceutical companies experienced a challenging first quarter in 2016, in particular in January and early February. The period under review included Pfizer’s (5.1% of Fund net assets^†) proposed acquisition of Allergan (4.7% of Fund net assets^†), announced on November 23, for approximately $184 billion.⁹ The deal had been expected to close in the second half of 2016 and would been the largest merger ever between drug developers.¹⁰ It would also have been the largest “inversion” merger ever.¹¹ (Following U.S. Treasury rule changes after the end of the first quarter, Pfizer decided to abandon its takeover plans.)¹² At the start of 2016, in addition to being affected by the general malaise in the market, the pharma industry as a whole was not helped by the woes of Valeant (sold by end of period). Consequently, the Fund experienced a loss over the six month period. While companies in Denmark and the U.K. were positive contributors to the Fund’s overall performance, their contributions were too small to offset the negative performance of U.S. companies. Swiss companies also detracted from performance.

 

Retail

 

The Fund returned 7.20%* for the six month period under review. The first three months of this period, the prelude to the holiday season, brought with it positive performance, with the Fund ending December up over the quarter. The first three months of 2016 were, however, somewhat more challenging. Following a tough holiday season (with the headwinds of both deflation and the weather in December constricting the growth in holiday sales),¹³ stocks fell through January to reach a low point in early February. Despite continuing slow growth (but growth nonetheless) in consumer spending in the U.S. in February,¹⁴ stocks recovered significantly throughout the rest of the month and into March, to end the six month period under review above where they began. While stores involved in specialty retail, together with those in food and staples retailing, made the greatest contributions to total return, internet and catalog retailing also contributed positively to the Fund’s overall performance. Healthcare providers & services was the single retail sector to detract from overall performance.

 

 

Semiconductor

 

Despite softening demand, a strong U.S. dollar, cyclicality, and normal market trends, at $335.2 billion, global semiconductor sales in 2015 were only slightly down (0.2%) from the record sales of $335.8 billion achieved by the industry in 2014.¹⁵ Sales in the last quarter of 2015 amounted to $82.9 billion, 5.2% lower than the $87.4 billion recorded in the same quarter the previous year.¹⁶ January 2016 was marked by slow global semiconductor sales: $26.9 billion, 2.7% lower than the total for December and 5.8% down from the total of $28.5 billion recorded in January 2015. Once again, sales were hit by a strong dollar and continuing concerns about the global economy.¹⁷ Macroeconomic headwinds also hit sales in February. Worldwide sales of $26 billion for the month were down 3.2% on January and down 6.2% on February 2015 ($27.7 billion).¹⁸ Semiconductor companies, too, faced a challenging January and early February, hitting a nadir toward the middle of the month. The rest of February and March saw their stocks climb slowly and, by the end of the quarter, not only recouping the Fund’s losses, but also concluding the whole six month period under review returning a noteworthy 12.5%. Companies in the U.S., followed by those in Taiwan, contributed the most to the Fund’s positive performance. While Taiwan’s Taiwan Semiconductor Manufacturing Co. (13.2% of Fund net assets^†) was the single largest positive contributor to performance, Micron Technology (3.1% of Fund net assets^†), based in the U.S., was the single largest detractor from the Fund’s performance.

 

†	All Fund assets referenced are Total Net Assets as of March 31, 2016.
‡	S&P 500® Index consists of 500 widely held common stocks covering the industrial, utility, financial, and transportation sectors
*	Returns based on NAV. The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Funds reflects temporary waivers of expenses and/or fees. Had the Funds incurred all expenses, investment returns would have been reduced. Investment return and value of the shares of the Funds will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted.

 

1	Motley Fool: Why Did Biotech Fall Off a Cliff in January, http://www.fool.com/investing/general/2016/02/04/why-did-biotech-fall-off-a-cliff-in-january.aspx
2	Ibid.
3	Board of Governors of the Federal Reserve System: Industrial Production and Capacity Utilization - G.17, http://www.federalreserve.gov/releases/g17/Current/
4	U.S. Census Bureau News: New Residential Construction in March 2016, https://www.census.gov/construction/nrc/pdf/newresconst.pdf
5	Las Vegas Review-Journal: Macau gaming market hits five-year low in 2015; revenue falls below $30B, http://www.reviewjournal.com/business/casinos-gaming/macau-gaming-market-hits-five-year-low-2015-revenue-falls-below-30b
6	Gaming Inspection and Coordination Bureau, Macao SAR: Monthly Gross Revenue from Games of Fortune, http://www.dicj.gov.mo/web/en/information/DadosEstat_mensal/2016/index.html
7	Focus Gaming News: Macau reported smallest decline in 20 months, http://focusgn.com/macau-reported-smallest-decline-in-20-months
8	Gaming Inspection and Coordination Bureau, Macao SAR: Monthly Gross Revenue from Games of Fortune, http://www.dicj.gov.mo/web/en/information/DadosEstat_mensal/2016/index.html
9	BioSpace: 2015 Was a Record Breaker in M&A in Pharma, Medical and Biotech with Deals Worth $575 Billion, http://www.biospace.com/News/2015-was-a-record-breaker-for-ma-in-pharma-medical/405749
10	GEN: Top 15 M&A Deals of 2015, http://www.genengnews.com/insight-and-intelligence/top-15-m-a-deals-of-2015/77900597/
11	Ibid.
12	Wall Street Journal: Pfizer to Walk Away From Allergan Deal, http://www.wsj.com/articles/pfizer-to-walk-away-from-allergan-deal-1459907657?mod=djemCFO_h
13	National Retail Federation: Retail Holiday Sales Increase 3 Percent, https://nrf.com/news/retail-holiday-sales-increase-3-percent
14	National Retail Federation: Retail Sales Muted in February, https://nrf.com/news/retail-sales-muted-february
15	Semiconductor Industry Association: Global Semiconductor Sales Top $335 Billion in 2015, http://www.semiconductors.org/news/2016/02/01/global_sales_report_2015/global_semiconductor_sales_top_335_billion_in_2015/
16	Ibid.
17	Semiconductor Industry Association: Global Semiconductor Sales Off to Sluggish Start in 2016, http://www.semiconductors.org/news/2016/03/03/global_sales_report_2015/global_semiconductor_sales_off_to_sluggish_start_in_2016/
18	Semiconductor Industry Association: Global Semiconductor Sales Dip Slightly in February, http://www.semiconductors.org/news/2016/04/04/global_sales_report_2015/global_semiconductor_sales_dip_slightly_in_february/

BIOTECH ETF

PERFORMANCE COMPARISON

March 31, 2016 (unaudited)

 

Total Return		Share Price1				NAV				MVBBHTR2
Six Months			(9.07	)%			(9.11	)%			(9.01	)%
One Year			(19.77	)%			(19.74	)%			(19.63	)%
Life* (annualized)			28.86	%			28.85	%			29.08	%
Life* (cumulative)			195.94	%			195.89	%			198.13	%
* since 12/20/2011

 

Commencement date for the VanEck Vectors Biotech ETF was 12/20/11.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NASDAQ. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (12/20/11) to the first day of secondary market trading in shares of the Fund (12/21/11), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.

 

Gross Expense Ratio 0.40% / Net Expense Ratio 0.35%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.35% of the Fund’s average daily net assets per year until at least February 1, 2017. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.

 

The “Net Asset Value” (NAV) of a VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. 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.

 

2

MVIS US Listed Biotech 25 Index (MVBBHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the largest and the most liquid common stocks and depositary receipts of U.S. exchange-listed companies that derive at least 50% of their revenues from biotechnology, which includes companies engaged primarily in research and development as well as production, marketing and sales of drugs based on genetic analysis and diagnostic equipment (excluding pharmacies).

 

MVIS US Listed Biotech 25 Index (the “Index”) is the exclusive property of MV Index Solutions GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MV Index Solutions GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. VanEck Vectors Biotech ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by MV Index Solutions GmbH and MV Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund.

ENVIRONMENTAL SERVICES ETF

PERFORMANCE COMPARISON

March 31, 2016 (unaudited)

 

Total Return		Share Price1				NAV				AXENV2
Six Months			12.69	%			11.83	%			12.22	%
One Year			2.31	%			1.97	%			2.57	%
Five Year			5.14	%			5.11	%			5.65	%
Life* (annualized)			6.41	%			6.40	%			6.94	%
Life* (cumulative)			80.05	%			79.88	%			88.80	%
* since 10/10/2006

 

Commencement date for the VanEck Vectors Environmental Services ETF was 10/10/06.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (10/10/06) to the first day of secondary market trading in shares of the Fund (10/16/06), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.

 

Gross Expense Ratio 1.03% / Net Expense Ratio 0.55%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.55% of the Fund’s average daily net assets per year until at least February 1, 2017. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.

 

The “Net Asset Value” (NAV) of a VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. 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.

 

2

NYSE Arca Environmental Services Index (AXENV) is a modified equal dollar-weighted index comprised of publicly traded companies that engage in business activities that may benefit from the global increase in demand for consumer waste disposal, removal and storage of industrial by-products, and the management of associated resources.

 

NYSE Arca Environmental Services Index (the “Index”) is a trademark of NYSE or its affiliates, is licensed for use by Van Eck Associates Corporation. NYSE neither sponsors nor endorses the Fund and makes no representation as to the accuracy and/or completeness of the Index or results to be obtained by any person from using the Index in connection with trading of the Fund.

GAMING ETF

PERFORMANCE COMPARISON

March 31, 2016 (unaudited)

 

Total Return		Share Price1				NAV				MVBJKTR2
Six Months			19.77	%			18.69	%			19.05	%
One Year			(3.30	)%			(3.79	)%			(3.54	)%
Five Year			4.36	%			4.35	%			4.78	%
Life* (annualized)			0.90	%			0.87	%			1.64	%
Life* (cumulative)			7.62	%			7.34	%			14.26	%
* since 1/22/2008

 

Index data prior to September 24, 2012 reflects that of the S-Network Global Gaming Index (WAGRT). From September 24, 2012, forward, the index data reflects that of the Fund’s underlying index, MVIS Global Gaming Index (MVBJKTR). Index history which includes periods prior to September 24, 2012 reflects a blend of the performance of WAGRT and MVBJKTR and is not intended for third party use.

 

Commencement date for the VanEck Vectors Gaming ETF was 1/22/08.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (1/22/08) to the first day of secondary market trading in shares of the Fund (1/24/08), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.

 

Gross Expense Ratio 1.10% / Net Expense Ratio 0.66%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.65% of the Fund’s average daily net assets per year until at least February 1, 2017. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in cash. Shares may trade at a premium or discount to their NAV in the secondary market.

 

The “Net Asset Value” (NAV) of a VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. 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.

 

2

MVIS Global Gaming Index (MVBJKTR) is a rules based index intended to give investors a means of tracking the overall performance of the largest and most liquid companies in the global gaming industry that generate at least 50% of their revenues from casinos and hotels, sports betting (including internet gambling and racetracks) and lottery services as well as gaming services, gaming technology and gaming equipment.

 

MVIS Global Gaming Index (the “Index”) is the exclusive property of MV Index Solutions GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MV Index Solutions GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. VanEck Vectors Gaming ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by MV Index Solutions GmbH and MV Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund.

GENERIC DRUGS ETF

PERFORMANCE COMPARISON

March 31, 2016 (unaudited)

 

Total Return		Share Price1				NAV				IGNRXT2
Life* (cumulative)			(4.60	)%			(4.92	)%			(4.60	)%
* since 1/12/2016

 

Commencement date for the VanEck Vectors Generic Drugs ETF was 1/12/16.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NASDAQ. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (1/12/16) to the first day of secondary market trading in shares of the Fund (1/13/16), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.

 

Gross Expense Ratio 6.96% / Net Expense Ratio 0.55%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.55% of the Fund’s average daily net assets per year until at least February 1, 2017. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in cash. Shares may trade at a premium or discount to their NAV in the secondary market.

 

The “Net Asset Value” (NAV) of a VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. 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.

 

2

Indexx Global Generics & New Pharma Index (IGNRXT) a rules based, modified capitalization weighted index. The Index includes exchange-listed companies, on a global basis, that derive a significant proportion (as determined by Indxx, LLC) of their revenues (or that have the potential to derive a significant proportion of their revenues) from the generic drug industry, or that have a primary business focus on the generic drug industry.

 

Indexx Global Generics & New Pharma Index (the “Index”) is the exclusive property of Indxx, LLC. Indxx, LLC uses its best efforts to ensure that the Index is calculated correctly. Indxx, LLC has no obligation to point out errors in the Index to third parties. VanEck Vectors Generic Drugs ETF is not sponsored, endorsed, sold or promoted by Indxx, LLC and Indxx, LLC makes no representation regarding the advisability of investing in VanEck Vectors Generic Drugs ETF.

PHARMACEUTICAL ETF

PERFORMANCE COMPARISON

March 31, 2016 (unaudited)

 

Total Return		Share Price1				NAV				MVPPHTR2
Six Months			(7.99	)%			(8.05	)%			(8.05	)%
One Year			(16.61	)%			(16.56	)%			(16.54	)%
Life* (annualized)			14.28	%			14.02	%			13.94	%
Life* (cumulative)			77.04	%			75.32	%			74.77	%
* since 12/20/2011

 

Commencement date for the VanEck Vectors Pharmaceutical ETF was 12/20/11.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NASDAQ. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (12/20/11) to the first day of secondary market trading in shares of the Fund (12/21/11), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.

 

Gross Expense Ratio 0.41% / Net Expense Ratio 0.35%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.35% of the Fund’s average daily net assets per year until at least February 1, 2017. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.

 

The “Net Asset Value” (NAV) of a VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. 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.

 

2

MVIS US Listed Pharmaceutical 25 Index (MVPPHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the largest and the most liquid common stocks and depositary receipts of U.S. exchange-listed companies that derive at least 50% of their revenues from pharmaceuticals, which includes companies engaged primarily in research and development as well as production, marketing and sales of pharmaceuticals.

 

MVIS US Listed Pharmaceutical 25 Index (the “Index”) is the exclusive property of MV Index Solutions GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MV Index Solutions GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. VanEck Vectors Pharmaceutical ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by MV Index Solutions GmbH and MV Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund.

RETAIL ETF

PERFORMANCE COMPARISON

March 31, 2016 (unaudited)

 

Total Return		Share Price1				NAV				MVRTHTR2
Six Months			7.26	%			7.20	%			7.20	%
One Year			1.80	%			1.87	%			1.83	%
Life* (annualized)			20.35	%			20.05	%			19.85	%
Life* (cumulative)			120.95	%			118.56	%			117.02	%
* since 12/20/2011

 

Commencement date for the VanEck Vectors Retail ETF was 12/20/11.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (12/20/11) to the first day of secondary market trading in shares of the Fund (12/21/11), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.

 

Gross Expense Ratio 0.43% / Net Expense Ratio 0.35%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.35% of the Fund’s average daily net assets per year until at least February 1, 2017. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.

 

The “Net Asset Value” (NAV) of a VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. 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.

 

2

MVIS US Listed Retail 25 Index (MVRTHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the largest and the most liquid common stocks and depositary receipts of U.S. exchange-listed companies that derive at least 50% of their revenues from retail, which includes companies engaged primarily in retail distribution; wholesalers; online, direct mail and TV retailers; multi-line retailers; specialty retailers, such as apparel, automotive, computer and electronics, drug, home improvement and home furnishing retailers; and food and other staples retailers.

 

MVIS US Listed Retail 25 Index (the “Index”) is the exclusive property of MV Index Solutions GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MV Index Solutions GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. VanEck Vectors Retail ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by MV Index Solutions GmbH and MV Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund.

SEMICONDUCTOR ETF

PERFORMANCE COMPARISON

March 31, 2016 (unaudited)

 

Total Return		Share Price1				NAV				MVSMHTR2
Six Months			12.76	%			12.51	%			12.57	%
One Year			1.70	%			1.58	%			1.65	%
Life* (annualized)			17.11	%			17.17	%			17.04	%
Life* (cumulative)			96.55	%			97.02	%			96.11	%
* since 12/20/2011

 

Commencement date for the VanEck Vectors Semiconductor ETF was 12/20/11.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (12/20/11) to the first day of secondary market trading in shares of the Fund (12/21/11), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when old, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.

 

Gross Expense Ratio 0.41% / Net Expense Ratio 0.35%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.35% of the Fund’s average daily net assets per year until at least February 1, 2017. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.

 

The “Net Asset Value” (NAV) of a VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. 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.

 

2

MVIS US Listed Semiconductor 25 Index (MVSMHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the largest and the most liquid common stocks and depositary receipts of U.S. exchange-listed companies that derive at least 50% of their revenues from semiconductors, which includes the production of semiconductors and semiconductor equipment.

 

MVIS US Listed Semiconductor 25 Index (the “Index”) is the exclusive property of MV Index Solutions GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MV Index Solutions GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. VanEck Vectors Semiconductor ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by MV Index Solutions GmbH and MV Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund.

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, 2015 to March 31, 2016.

 

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 your 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 program fees. 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				Ending				Annualized
		Account				Account				Expense
		Value				Value				Ratio				Expenses Paid
		October 1, 2015				March 31, 2016				During Period				During the Period
Biotech ETF*
Actual		$	1,000.00			$	908.90				0.35	%			$1.67
Hypothetical**		$	1,000.00			$	1,023.25				0.35	%			$1.77
Environmental Services ETF*
Actual		$	1,000.00			$	1,118.30				0.55	%			$2.91
Hypothetical**		$	1,000.00			$	1,022.25				0.55	%			$2.78
Gaming ETF*
Actual		$	1,000.00			$	1,186.90				0.66	%			$3.61
Hypothetical**		$	1,000.00			$	1,021.70				0.66	%			$3.34
Generic Drugs ETF#
Actual		$	1,000.00			$	950.80				0.55	%			$1.16
Hypothetical**		$	1,000.00			$	1,009.61				0.55	%			$1.19
Pharmaceutical ETF*
Actual		$	1,000.00			$	919.50				0.35	%			$1.68
Hypothetical**		$	1,000.00			$	1,023.25				0.35	%			$1.77
Retail ETF*
Actual		$	1,000.00			$	1,072.00				0.35	%			$1.81
Hypothetical**		$	1,000.00			$	1,023.25				0.35	%			$1.77
Semiconductor ETF*
Actual		$	1,000.00			$	1,125.10				0.35	%			$1.86
Hypothetical**		$	1,000.00			$	1,023.25				0.35	%			$1.77

*	Expenses are equal to the Fund’s annualized expense ratio (for the six months ended March 31, 2016) 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 January 12, 2016 (commencement of operations) to March 31, 2016) 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.

BIOTECH ETF

SCHEDULE OF INVESTMENTS

March 31, 2016 (unaudited)

 

 

See Notes to Financial Statements

 

 

ADR	American Depositary Receipt
USD	United States Dollar
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $18,360,475.

Summary of Investments by Sector Excluding
Collateral for Securities Loaned (unaudited)		% of Investments					Value
Biotechnology				74.6	%		$	386,541,117
Health Care				15.6				81,087,065
Life Sciences Tools & Services				9.8				50,716,014
Money Market Fund				0.0				207,758
				100.0	%		$	518,551,954

 

The summary of inputs used to value the Fund’s investments as of March 31, 2016 is as follows:

 

						Level 2			Level 3
		Level 1				Significant			Significant
		Quoted				Observable			Unobservable
		Prices				Inputs			Inputs					Value
Common Stocks*		$	518,344,196			$	—			$	—			$	518,344,196
Money Market Fund			207,758				—				—				207,758
Repurchase Agreements			—				17,977,822				—				17,977,822
Total		$	518,551,954			$	17,977,822			$	—			$	536,529,776

 

* See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2016.

 

See Notes to Financial Statements

ENVIRONMENTAL SERVICES ETF

SCHEDULE OF INVESTMENTS

March 31, 2016 (unaudited)

 

 

See Notes to Financial Statements

 

 

USD	United States Dollar
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $931,424.

Summary of Investments by Sector Excluding
Collateral for Securities Loaned (unaudited)		% of Investments					Value
Consumer Discretionary				3.8	%		$	616,884
Consumer Staples				4.0				651,823
Energy				2.0				323,650
Health Care				7.8				1,257,601
Industrials				78.0				12,663,869
Materials				3.9				631,130
Money Market Fund				0.5				82,509
				100.0	%		$	16,227,466

 

The summary of inputs used to value the Fund’s investments as of March 31, 2016 is as follows:

 

						Level 2			Level 3
		Level 1				Significant			Significant
		Quoted				Observable			Unobservable
		Prices				Inputs			Inputs					Value
Common Stocks*		$	16,144,957			$	—			$	—			$	16,144,957
Money Market Fund			82,509				—				—				82,509
Repurchase Agreements			—				1,041,744				—				1,041,744
Total		$	16,227,466			$	1,041,744			$	—			$	17,269,210

 

* See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2016.

 

See Notes to Financial Statements

GAMING ETF

SCHEDULE OF INVESTMENTS

March 31, 2016 (unaudited)

 

 

See Notes to Financial Statements

 

 

ADR	American Depositary Receipt
SDR	Special Drawing Right
USD	United States Dollar
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $655,793.
#	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 $14,148,954 which represents 69.4% of net assets.

Summary of Investments by Sector Excluding
Collateral for Securities Loaned (unaudited)		% of Investments					Value
Consumer Discretionary				94.1	%		$	19,179,791
Financials				1.9				383,501
Information Technology				3.9				805,376
Money Market Fund				0.1				17,110
				100.0	%		$	20,385,778

 

The summary of inputs used to value the Fund’s investments as of March 31, 2016 is as follows:

 

						Level 2			Level 3
		Level 1				Significant			Significant
		Quoted				Observable			Unobservable
		Prices				Inputs			Inputs					Value
Common Stocks
Australia		$	—			$	2,953,676			$	—			$	2,953,676
Canada			292,181				—				—				292,181
China / Hong Kong			435,914				4,114,282				—				4,550,196
Greece			—				237,734				—				237,734
Ireland			—				1,366,640				—				1,366,640
Japan			—				708,999				—				708,999
Malaysia			200,571				627,309				—				827,880
Malta			—				282,534				—				282,534
New Zealand			—				288,248				—				288,248
Singapore			—				652,395				—				652,395
South Africa			—				178,921				—				178,921
South Korea			—				779,790				—				779,790
Sweden			—				662,401				—				662,401
United Kingdom			331,787				1,296,025				—				1,627,812
United States			4,575,760				—				—				4,575,760
Real Estate Investment Trust
United States			383,501				—				—				383,501
Money Market Fund			17,110				—				—				17,110
Repurchase Agreement			—				674,455				—				674,455
Total		$	6,236,824			$	14,823,409			$	—			$	21,060,233

 

During the period ended March 31, 2016, transfers of securities from Level 2 to Level 1 were $255,294. 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

GENERIC DRUGS ETF

SCHEDULE OF INVESTMENTS

March 31, 2016 (unaudited)

 

 

See Notes to Financial Statements

 

 

 

 

ADR	American Depositary Receipt
CHF	Swiss Franc
GBP	British Pound
INR	Indian Rupee
USD	United States Dollar
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $74,537.
#	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 $1,123,990 which represents 46.9% of net assets.
§	Illiquid Security—the aggregate value of illiquid securities is $33 which represents 0.0% of net assets.
Reg S	Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.
144A	Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted to $11,477, or 0.5% of net assets.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned (unaudited)		% of Investments				Value
Biotechnology			16.0	%		$	385,966
Health Care Distributors			1.4				32,938
Life Sciences Tools & Services			10.1				242,671
Pharmaceuticals			69.7				1,679,225
Specialty Chemicals			2.6				62,460
Money Market Fund			0.2				5,379
			100.0	%		$	2,408,639

 

See Notes to Financial Statements

GENERIC DRUGS ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

The summary of inputs used to value the Fund’s investments as of March 31, 2016 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs					Value
Common Stocks
Belgium		$	—			$	79,810			$	—			$	79,810
Canada			11,013				—				—				11,013
China / Hong Kong			—				120,771				—				120,771
Finland			—				28,991				—				28,991
Germany			—				21,572				—				21,572
Hungary			—				24,136				—				24,136
India			50,387				299,710				—				350,097
Indonesia			—				19,317				—				19,317
Ireland			280,210				—				—				280,210
Israel			193,557				—				—				193,557
Japan			—				133,583				—				133,583
Jordan			—				29,554				—				29,554
Luxembourg			—				8,618				—				8,618
South Africa			—				56,708				—				56,708
South Korea			—				159,926				—				159,926
Spain			—				8,416				—				8,416
Sweden			—				40,386				—				40,386
Switzerland			—				77,057				—				77,057
Taiwan			—				15,402				—				15,402
United States			744,103				—				—				744,103
Rights
India			—				33				—				33
Money Market Fund			5,379				—				—				5,379
Repurchase Agreement			—				75,533				—				75,533
Total		$	1,284,649			$	1,199,523			$	—			$	2,484,172

 

There were no transfers between levels during the period ended March 31, 2016.

 

See Notes to Financial Statements

 PHARMACEUTICAL ETF

SCHEDULE OF INVESTMENTS

March 31, 2016 (unaudited)

 

 

See Notes to Financial Statements

PHARMACEUTICAL ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

ADR	American Depositary Receipt
USD	United States Dollar
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $22,639,023.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned (unaudited)		% of Investments				Value
Health Care			18.6	%		$	46,615,008
Health Care Equipment			5.0				12,418,741
Pharmaceuticals			76.4				191,283,259
			100.0	%		$	250,317,008

 

The summary of inputs used to value the Fund’s investments as of March 31, 2016 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs					Value
Common Stocks*		$	250,317,008			$	—			$	—			$	250,317,008
Repurchase Agreements			—				23,006,396				—				23,006,396
Total		$	250,317,008			$	23,006,396			$	—			$	273,323,404

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2016.

 

See Notes to Financial Statements

RETAIL ETF

SCHEDULE OF INVESTMENTS

March 31, 2016 (unaudited)

 

 

See Notes to Financial Statements

RETAIL ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

ADR	American Depositary Receipt
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $1,982,514.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned (unaudited)		% of Investments				Value
Consumer Discretionary			58.1	%		$	81,738,146
Consumer Staples			32.1				45,168,665
Health Care			9.8				13,785,758
Money Market Fund			0.0				4,542
			100.0	%		$	140,697,111

 

The summary of inputs used to value the Fund’s investments as of March 31, 2016 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs					Value
Common Stocks*		$	140,692,569			$	—			$	—			$	140,692,569
Money Market Fund			4,542				—				—				4,542
Repurchase Agreements			—				2,062,277				—				2,062,277
Total		$	140,697,111			$	2,062,277			$	—			$	142,759,388

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2016.

 

See Notes to Financial Statements

 SEMICONDUCTOR ETF

SCHEDULE OF INVESTMENTS

March 31, 2016 (unaudited)

 

 

See Notes to Financial Statements

SEMICONDUCTOR ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

ADR	American Depositary Receipt
USD	United States Dollar
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $7,504,324.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned (unaudited)		% of Investments				Value
Information Technology			19.8	%		$	38,366,474
Semiconductor Equipment			13.4				25,987,920
Semiconductors			66.8				129,637,328
Money Market Fund			0.0				9,146
			100.0	%		$	194,000,868

 

The summary of inputs used to value the Fund’s investments as of March 31, 2016 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs					Value
Common Stocks*		$	193,991,722			$	—			$	—			$	193,991,722
Money Market Fund			9,146				—				—				9,146
Repurchase Agreements			—				7,708,284				—				7,708,284
Total		$	194,000,868			$	7,708,284			$	—			$	201,709,152

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2016.

 

See Notes to Financial Statements

[This page intentionally left blank.]

VANECK VECTORS ETF TRUST

STATEMENTS OF ASSETS AND LIABILITIES

March 31, 2016 (unaudited)

 

		Biotech ETF						Environmental Services ETF						Gaming ETF						Generic Drugs ETF
Assets:
Investments, at value (1) (2)			$	518,551,954					$	16,227,466					$	20,385,778					$	2,408,639
Short-term investments held as collateral for securities loaned (3)				17,977,822						1,041,744						674,455						75,533
Cash denominated in foreign currency, at value (4)				—						—						175,744						7,114
Receivables:
Investment securities sold				—						822,357						16,448						—
Shares sold				—						—						—						—
Due from Adviser				—						—						—						11,853
Dividends				63,929						21,675						131,556						2,278
Prepaid expenses				9,216						2,607						2,749						4,977
Total assets				536,602,921						18,115,849						21,386,730						2,510,394
Liabilities:
Payables:
Investment securities purchased				1,551						866,314						17,905						5,682
Collateral for securities loaned				17,977,822						1,041,744						674,455						75,533
Line of credit				—						—						168,028						—
Shares redeemed				—						—						—						—
Due to Adviser				122,201						1,708						3,399						—
Due to custodian				—						—						17,110						—
Deferred Trustee fees				27,001						1,973						5,066						—
Accrued expenses				98,863						71,128						107,632						31,913
Total liabilities				18,227,438						1,982,867						993,595						113,128
NET ASSETS			$	518,375,483					$	16,132,982					$	20,393,135					$	2,397,266
Shares outstanding				4,996,503						250,000						600,000						100,000
Net asset value, redemption and offering price per share			$	103.75					$	64.53					$	33.99					$	23.97
Net assets consist of:
Aggregate paid in capital			$	649,278,193					$	29,600,620					$	31,274,153					$	2,521,970
Net unrealized appreciation (depreciation)				(127,748,451	)					1,971,694						(5,063,940	)					(88,658	)
Undistributed net investment income				247,082						40,454						174,113						1,693
Accumulated net realized gain (loss)				(3,401,341	)					(15,479,786	)					(5,991,191	)					(37,739	)
			$	518,375,483					$	16,132,982					$	20,393,135					$	2,397,266
(1) Value of securities on loan			$	18,360,475					$	931,424					$	655,793					$	74,537
(2) Cost of investments			$	646,300,405					$	14,255,772					$	25,454,177					$	2,497,351
(3) Cost of short-term investments held as collateral for securities loaned			$	17,977,822					$	1,041,744					$	674,455					$	75,533
(4) Cost of cash denominated in foreign currency			$	—					$	—					$	171,641					$	7,085

 

See Notes to Financial Statements

Pharmaceutical						Retail					Semiconductor
ETF						ETF					ETF
	$	250,317,008					$	140,697,111				$	194,000,868
		23,006,396						2,062,277					7,708,284
		—						—					—
		1,254,646						—					—
		—						—					5
		—						—					—
		1,760,308						215,354					28,295
		5,839						4,310					6,299
		276,344,197						142,979,052					201,743,751
		825						578					807
		23,006,396						2,062,277					7,708,284
		870,887						316,568					—
		900						—					32
		63,792						32,926					76,357
		11						—					169
		16,944						3,767					19,340
		82,524						56,796					93,034
		24,042,279						2,472,912					7,898,023
	$	252,301,918					$	140,506,140				$	193,845,728
		4,388,138						1,821,531					3,520,937
	$	57.50					$	77.14				$	55.06
	$	321,330,038					$	140,161,408				$	169,735,827
		(64,016,313	)					(7,028,748	)				(14,822,658	)
		2,756,807						661,441					1,150,403
		(7,768,614	)					6,712,039					37,782,156
	$	252,301,918					$	140,506,140				$	193,845,728
	$	22,639,023					$	1,982,514				$	7,504,324
	$	314,333,321					$	147,725,859				$	208,823,526
	$	23,006,396					$	2,062,277				$	7,708,284
	$	—					$	—				$	—

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF OPERATIONS

For the Six Months Ended March 31, 2016 (unaudited)

 

		Biotech ETF						Environmental Services ETF						Gaming ETF						Generic Drugs ETF (a)
Income:
Dividends			$	1,927,148					$	118,026					$	298,277					$	4,628
Securities lending income				19,411						2,571						3,887						332
Foreign taxes withheld				(16,951	)					(2,080	)					(15,173	)					(423	)
Total income				1,929,608						118,517						286,991						4,537
Expenses:
Management fees				1,079,501						37,083						55,212						2,587
Professional fees				50,247						25,902						25,490						13,477
Insurance				6,798						134						238						—
Trustees’ fees and expenses				11,111						712						969						930
Reports to shareholders				22,185						4,139						5,769						3,956
Indicative optimized portfolio value fee				2,144						—						9,131						1,233
Custodian fees				10,360						1,012						12,178						8,620
Registration fees				2,536						2,535						2,554						1,522
Transfer agent fees				1,072						1,071						1,071						548
Fund accounting fees				16,987						391						3,324						1,674
Interest				5,133						129						1,291						—
Other				19,948						3,666						4,135						1,475
Total expenses				1,228,022						76,774						121,362						36,022
Waiver of management fees				(143,389	)					(35,854	)					(48,295	)					(2,587	)
Expenses assumed by the Adviser				—						—						—						(30,591	)
Net expenses				1,084,633						40,920						73,067						2,844
Net investment income				844,975						77,597						213,924						1,693
Net realized gain (loss) on:
Investments				(7,624,557	)					(303,842	)					(2,058,955	)					(35,951	)
In-kind redemptions				8,825,285						—						(725,698	)					—
Foreign currency transactions and foreign denominated assets and liabilities				—						—						(9,788	)					(1,788	)
Net realized gain (loss)				1,200,728						(303,842	)					(2,794,441	)					(37,739	)
Net change in unrealized appreciation (depreciation) on:
Investments				(58,405,861	)					1,936,337						6,378,937						(88,712	)
Foreign currency transactions and foreign denominated assets and liabilities				—						—						6,014						54
Net change in unrealized appreciation (depreciation)				(58,405,861	)					1,936,337						6,384,951						(88,658	)
Net Increase (Decrease) in Net Assets Resulting from Operations			$	(56,360,158	)				$	1,710,092					$	3,804,434					$	(124,704	)

 

(a)	Commencement of operations for Generic Drugs ETF was January 12, 2016.

 

See Notes to Financial Statements

Pharmaceutical						Retail					Semiconductor
ETF						ETF					ETF
	$	4,472,038					$	1,331,603				$	2,365,927
		21,560						2,822					23,651
		(182,495	)					—					—
		4,311,103						1,334,425					2,389,578
		558,939						292,846					503,277
		39,073						28,890					34,951
		3,203						1,786					3,598
		5,620						3,508					6,670
		11,605						7,077					13,627
		2,028						2,028					2,028
		4,622						4,687					5,046
		2,537						2,922					4,107
		1,071						1,071					1,071
		8,753						5,979					8,709
		5,282						331					1,761
		7,085						4,761					7,326
		649,818						355,886					592,171
		(85,595	)					(62,709	)				(87,133	)
		—						—					—
		564,223						293,177					505,038
		3,746,880						1,041,248					1,884,540
		(1,973,195	)					(344,969	)				(722,636	)
		(5,790,014	)					8,076,351					39,553,182
		—						—					—
		(7,763,209	)					7,731,382					38,830,546
		(24,127,328	)					1,051,438					3,772,529
		—						—					—
		(24,127,328	)					1,051,438					3,772,529
	$	(28,143,657	)				$	9,824,068				$	44,487,615

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

		Biotech ETF										Environmental Services ETF
		For the Six Months Ended March 31, 2016					For the Year Ended September 30, 2015					For the Six Months Ended March 31, 2016					For the Year Ended September 30, 2015
		(unaudited)										(unaudited)
Operations:
Net investment income			$	844,975				$	1,332,054				$	77,597				$	182,460
Net realized gain (loss)				1,200,728					190,171,733					(303,842	)				(339,674	)
Net change in unrealized appreciation (depreciation)				(58,405,861	)				(154,774,310	)				1,936,337					(1,128,708	)
Net increase (decrease) in net assets resulting from operations				(56,360,158	)				36,729,477					1,710,092					(1,285,922	)
Dividends to shareholders:
Dividends from net investment income				(1,869,172	)				—					(170,000	)				(263,000	)
Share transactions:**
Proceeds from sale of shares				51,346,305					515,674,327					—					12,572,433
Cost of shares redeemed				(126,719,884	)				(439,848,484	)				—					(12,572,433	)
Increase (Decrease) in net assets resulting from share transactions				(75,373,579	)				75,825,843					—					—
Total increase (decrease) in net assets				(133,602,909	)				112,555,320					1,540,092					(1,548,922	)
Net Assets, beginning of period				651,978,392					539,423,072					14,592,890					16,141,812
Net Assets, end of period†			$	518,375,483				$	651,978,392				$	16,132,982				$	14,592,890
† Including undistributed net investment income			$	247,082				$	1,271,279				$	40,454				$	132,857
** Shares of Common Stock Issued (no par value)
Shares sold				450,000					4,100,000					—					200,000
Shares redeemed				(1,150,000	)				(3,500,000	)				—					(200,000	)
Net increase (decrease)				(700,000	)				600,000					—					—

 

*	Commencement of operations

 

See Notes to Financial Statements

Gaming ETF										Generic Drugs ETF					Pharmaceutical ETF
For the Six Months Ended March 31, 2016					For the Year Ended September 30, 2015					For the Period January 12, 2016* through March 31, 2016					For the Six Months Ended March 31, 2016					For the Year Ended September 30, 2015
(unaudited)										(unaudited)					(unaudited)
	$	213,924				$	980,387				$	1,693				$	3,746,880				$	6,580,800
		(2,794,441	)				(139,806	)				(37,739	)				(7,763,209	)				70,592,801
		6,384,951					(11,556,233	)				(88,658	)				(24,127,328	)				(75,458,283	)
		3,804,434					(10,715,652	)				(124,704	)				(28,143,657	)				1,715,318
		(909,300	)				(1,789,800	)				—					(2,413,811	)				(6,396,063	)
		—					5,948,582					2,521,970					233,831,729					276,929,722
		(6,361,161	)				(12,968,022	)				—					(265,269,566	)				(363,840,122	)
		(6,361,161	)				(7,019,440	)				2,521,970					(31,437,837	)				(86,910,400	)
		(3,466,027	)				(19,524,892	)				2,397,266					(61,995,305	)				(91,591,145	)
		23,859,162					43,384,054					—					314,297,223					405,888,368
	$	20,393,135				$	23,859,162				$	2,397,266				$	252,301,918				$	314,297,223
	$	174,113				$	869,489				$	1,693				$	2,756,807				$	1,423,738
		—					150,000					100,000					3,700,000					4,000,000
		(200,000	)				(350,000	)				—					(4,300,000	)				(5,400,000	)
		(200,000	)				(200,000	)				100,000					(600,000	)				(1,400,000	)

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

(continued)

		Retail ETF										Semiconductor ETF
		For the Six Months Ended March 31, 2016					For the Year Ended September 30, 2015					For the Six Months Ended March 31, 2016					For the Year Ended September 30, 2015
		(unaudited)										(unaudited)
Operations:
Net investment income			$	1,041,248				$	3,295,092				$	1,884,540				$	7,988,254
Net realized gain (loss)				7,731,382					24,307,265					38,830,546					(41,410,659	)
Net change in unrealized appreciation (depreciation)				1,051,438					(8,434,125	)				3,772,529					(3,130,916	)
Net increase (decrease) in net assets resulting from operations				9,824,068					19,168,232					44,487,615					(36,553,321	)
Dividends to shareholders:
Dividends from net investment income				(3,353,072	)				(690,116	)				(5,557,739	)				(6,554,432	)
Share transactions:**
Proceeds from sale of shares				77,026,059					332,584,044					2,451,972,937					7,511,380,699
Cost of shares redeemed				(146,899,447	)				(213,877,277	)				(2,487,980,231	)				(7,692,308,773	)
Increase (Decrease) in net assets resulting from share transactions				(69,873,388	)				118,706,767					(36,007,294	)				(180,928,074	)
Total increase (decrease) in net assets				(63,402,392	)				137,184,883					2,922,582					(224,035,827	)
Net Assets, beginning of period				203,908,532					66,723,649					190,923,146					414,958,973
Net Assets, end of period†			$	140,506,140				$	203,908,532				$	193,845,728				$	190,923,146
† Including undistributed net investment income			$	661,441				$	2,973,265				$	1,150,403				$	4,823,602
** Shares of Common Stock Issued (no par value)
Shares sold				1,000,000					4,600,000					47,500,000					140,850,000
Shares redeemed				(1,950,000	)				(2,900,000	)				(47,800,000	)				(145,150,000	)
Net increase (decrease)				(950,000	)				1,700,000					(300,000	)				(4,300,000	)

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		Biotech ETF #
		For the																For the Period
		Six Months																December 20,
		Ended																2011 (a) through
		March 31,				For the Year Ended September 30,												September 30,
		2016				2015				2014				2013				2012
		(unaudited)
Net asset value, beginning of period			$114.45				$105.84				$82.74				$54.07				$35.28
Income from investment operations:
Net investment income (loss)			0.16				0.24				(0.03	)			0.01				0.01
Net realized and unrealized gain (loss) on investments			(10.52	)			8.37				23.13				28.85				18.78
Total from investment operations			(10.36	)			8.61				23.10				28.86				18.79
Less:
Dividends from net investment income			(0.34	)			—				—	(e)			(0.02	)			—
Distributions from net realized capital gains			—				—				—				(0.17	)			—
Total dividends and distributions			(0.34	)			—				—				(0.19	)			—
Net asset value, end of period			$103.75				$114.45				$105.84				$82.74				$54.07
Total return (b)			(9.11	)%(d)			8.13	%			27.92	%			53.55	%			53.26	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$518,375				$651,978				$539,423				$434,089				$132,278
Ratio of gross expenses to average net assets			0.40	%(c)			0.40	%			0.41	%			0.41	%			0.44	%(c)
Ratio of net expenses to average net assets			0.35	%(c)			0.35	%			0.35	%			0.35	%			0.35	%(c)
Ratio of net expenses, excluding interest expense, to average net assets			0.35	%(c)			0.35	%			0.35	%			0.35	%			0.35	%(c)
Ratio of net investment income (loss) to average net assets			0.27	%(c)			0.18	%			(0.03	)%			0.01	%			0.03	%(c)
Portfolio turnover rate			11	%(d)			12	%			11	%			0	%			12	%(d)

 

		Environmental Services ETF
																		For the Period
		For the																January 1,				For the
		Six Months																2012 through				Year Ended
		March 31,				For the Year Ended September 30,												September 30,				December 31,
		2016				2015				2014				2013				2012				2011
		(unaudited)
Net asset value, beginning of period			$58.37				$64.57				$62.43				$49.65				$46.61				$51.54
Income from investment operations:
Net investment income			0.31				0.73				1.00				0.91				0.50				0.62
Net realized and unrealized gain (loss) on investments			6.53				(5.88	)			1.89				12.66				2.54				(4.93	)
Total from investment operations			6.84				(5.15	)			2.89				13.57				3.04				(4.31	)
Less:
Dividends from net investment income			(0.68	)			(1.05	)			(0.75	)			(0.79	)			—				(0.62	)
Net asset value, end of period			$64.53				$58.37				$64.57				$62.43				$49.65				$46.61
Total return (b)			11.83	%(d)			(8.18	)%			4.62	%			27.67	%			6.52	%(d)			(8.36	)%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$16,133				$14,593				$16,142				$18,729				$19,860				$23,305
Ratio of gross expenses to average net assets			1.03	%(c)			1.15	%			0.92	%			1.01	%			1.01	%(c)			0.83	%
Ratio of net expenses to average net assets			0.55	%(c)			0.55	%			0.55	%			0.55	%			0.55	%(c)			0.55	%
Ratio of net expenses, excluding interest expense, to average net assets			0.55	%(c)			0.55	%			0.55	%			0.55	%			0.55	%(c)			0.55	%
Ratio of net investment income to average net assets			1.05	%(c)			1.15	%			1.32	%			1.60	%			1.23	%(c)			1.08	%
Portfolio turnover rate			16	%(d)			19	%			13	%			5	%			4	%(d)			1	%

 

(a)	Commencement of operations
(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)	Annualized
(d)	Not Annualized
(e)	Amount represents less than $0.005 per share
#	On February 14, 2012, the Fund effected a 3 for 1 share split (See Note 10). Per share data has been adjusted to reflect the share split.

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		Gaming ETF
																		For the Period
		For the																January 1,				For the
		Six Months																2012 through				Year Ended
		March 31,				For the Year Ended September 30,												September 30,				December 31,
		2016				2015				2014				2013				2012				2011
		(unaudited)
Net asset value, beginning of period			$29.82				$43.38				$47.49				$34.22				$30.23				$31.48
Income from investment operations:
Net investment income			0.31	(e)			1.12	(e)			1.76				1.10				0.80				0.75
Net realized and unrealized gain (loss) on investments			5.16				(12.80	)			(5.35	)			13.55				3.19				(1.34	)
Total from investment operations			5.47				(11.68	)			(3.59	)			14.65				3.99				(0.59	)
Less:
Dividends from net investment income			(1.30	)			(1.88	)			(0.52	)			(1.38	)			—				(0.63	)
Distributions from net realized capital gains			—				—				—				—				—				(0.03	)
Total dividends and distributions			(1.30	)			(1.88	)			(0.52	)			(1.38	)			—				(0.66	)
Net asset value, end of period			$33.99				$29.82				$43.38				$47.49				$34.22				$30.23
Total return (b)			18.69	%(d)			(27.91	)%			(7.76	)%			44.14	%			13.20	%(d)			(1.87	)%
Ratios/Supplemental Data
Net assets, end of period (000’s)			$20,393				$23,859				$43,384				$56,982				$59,894				$96,729
Ratio of gross expenses to average net assets			1.10	%(c)			1.00	%			0.73	%			0.83	%			0.78	%(c)			0.66	%
Ratio of net expenses to average net assets			0.66	%(c)			0.66	%			0.65	%			0.65	%			0.66	%(c)			0.65	%
Ratio of net expenses, excluding interest expense, to average net assets			0.65	%(c)			0.65	%			0.65	%			0.65	%			0.65	%(c)			0.65	%
Ratio of net investment income to average net assets			1.94	%(c)			2.92	%			2.73	%			2.73	%			2.29	%(c)			1.91	%
Portfolio turnover rate			17	%(d)			27	%			35	%			16	%			18	%(d)			19	%

 

		Generic Drugs ETF
		For the Period
		January 12,
		2016 (a) through
		March 31,
		2016
		(unaudited)
Net asset value, beginning of period			$25.21
Income from investment operations:
Net investment income			0.02
Net realized and unrealized loss on investments			(1.26	)
Total from investment operations			(1.24	)
Net asset value, end of period			$23.97
Total return (b)			(4.92	)%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)			$2,397
Ratio of gross expenses to average net assets			6.96	%(c)
Ratio of net expenses to average net assets			0.55	%(c)
Ratio of net expenses, excluding interest expense, to average net assets			0.55	%(c)
Ratio of net investment income to average net assets			0.33	%(c)
Portfolio turnover rate			19	%(d)

 

(a)	Commencement of operations
(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)	Annualized
(d)	Not Annualized
(e)	Calculated based upon average shares outstanding.

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		Pharmaceutical ETF #
		For the																For the Period
		Six Months																December 20,
		Ended																2011 (a) through
		March 31,				For the Year Ended September 30,												September 30,
		2016				2015				2014				2013				2012
		(unaudited)
Net asset value, beginning of period			$63.01				$63.54				$47.89				$41.03				$35.96
Income from investment operations:
Net investment income			0.73	(e)			1.31				1.02				1.08				1.12
Net realized and unrealized gain (loss) on investments			(5.75	)			(0.62	)			15.66				7.78				3.95
Total from investment operations			(5.02	)			0.69				16.68				8.86				5.07
Less:
Dividends from net investment income			(0.49	)			(1.22	)			(1.03	)			(2.00	)			—
Net asset value, end of period			$57.50				$63.01				$63.54				$47.89				$41.03
Total return (b)			(8.05	)%(d)			0.96	%			35.19	%			22.44	%			14.10	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$252,302				$314,297				$405,888				$241,267				$173,897
Ratio of gross expenses to average net assets			0.41	%(c)			0.41	%			0.42	%			0.43	%			0.41	%(c)
Ratio of net expenses to average net assets			0.35	%(c)			0.36	%			0.35	%			0.35	%			0.35	%(c)
Ratio of net expenses, excluding interest expense, to average net assets			0.35	%(c)			0.35	%			0.35	%			0.35	%			0.35	%(c)
Ratio of net investment income to average net assets			2.35	%(c)			1.78	%			1.85	%			2.30	%			2.74	%(c)
Portfolio turnover rate			11	%(d)			12	%			14	%			3	%			1	%(d)

 

		Retail ETF *
		For the																For the Period
		Six Months																December 20,
		Ended																2011 (a) through
		March 31,				For the Year Ended September 30,												September 30,
		2016				2015				2014				2013				2012
		(unaudited)
Net asset value, beginning of period			$73.57				$62.27				$55.34				$44.88				$37.32
Income from investment operations:
Net investment income			0.47	(e)			1.12	(e)			0.60				0.27				0.95
Net realized and unrealized gain on investments			4.85				10.47				6.94				11.04				6.63
Total from investment operations			5.32				11.59				7.54				11.31				7.58
Less:
Dividends from net investment income			(1.75	)			(0.29	)			(0.61	)			(0.85	)			(0.02	)
Net asset value, end of period			$77.14				$73.57				$62.27				$55.34				$44.88
Total return (b)			7.20	%(d)			18.63	%			13.65	%			25.69	%			20.32	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$140,506				$203,909				$66,724				$42,696				$21,163
Ratio of gross expenses to average net assets			0.43	%(c)			0.42	%			0.63	%			0.69	%			0.55	%(c)
Ratio of net expenses to average net assets			0.35	%(c)			0.35	%			0.35	%			0.35	%			0.35	%(c)
Ratio of net expenses, excluding interest expense, to average net assets			0.35	%(c)			0.35	%			0.35	%			0.35	%			0.35	%(c)
Ratio of net investment income to average net assets			1.25	%(c)			1.49	%			1.23	%			1.84	%			1.40	%(c)
Portfolio turnover rate			3	%(d)			5	%			3	%			3	%			2	%(d)

 

(a)	Commencement of operations
(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)	Annualized
(d)	Not Annualized
(e)	Calculated based upon average shares outstanding.
#	On February 14, 2012, the Fund effected a 2 for 1 share split (See Note 10). Per share data has been adjusted to reflect the share split.
*	On February 14, 2012, the Fund effected a 3 for 1 share split (See Note 10). Per share data has been adjusted to reflect the share split.

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		Semiconductor ETF
		For the																For the Period
		Six Months																December 20,
		Ended																2011 (a) through
		March 31,				For the Year Ended September 30,												September 30,
		2016				2015				2014				2013				2012
		(unaudited)
Net asset value, beginning of period			$49.97				$51.10				$39.88				$31.66				$29.95
Income from investment operations:
Net investment income			0.35	(e)			1.08	(e)			0.62				0.72				0.56
Net realized and unrealized gain (loss) on investments			5.88				(1.58	)			11.26				8.20				1.15
Total from investment operations			6.23				(0.50	)			11.88				8.92				1.71
Less:
Dividends from net investment income			(1.14	)			(0.63	)			(0.66	)			(0.70	)			—
Net asset value, end of period			$55.06				$49.97				$51.10				$39.88				$31.66
Total return (b)			12.51	%(d)			(1.09	)%			30.13	%			28.70	%			5.71	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$193,846				$190,923				$414,959				$262,017				$282,397
Ratio of gross expenses to average net assets			0.41	%(c)			0.41	%			0.41	%			0.43	%			0.40	%(c)
Ratio of net expenses to average net assets			0.35	%(c)			0.35	%			0.35	%			0.35	%			0.35	%(c)
Ratio of net expenses, excluding interest expense, to average net assets			0.35	%(c)			0.35	%			0.35	%			0.35	%			0.35	%(c)
Ratio of net investment income to average net assets			1.31	%(c)			2.01	%			1.68	%			1.81	%			1.87	%(c)
Portfolio turnover rate			27	%(d)			18	%			9	%			4	%			2	%(d)

 

(a)	Commencement of operations
(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)	Annualized
(d)	Not Annualized
(e)	Calculated based upon average shares outstanding.

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

March 31, 2016 (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, 2016, offers fifty-seven 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, NYSE Euronext or MV Index Solutions GmbH (“MVIS”), a wholly-owned subsidiary of Van Eck Associates Corporation (the “Adviser”).

 

The Funds’ commencement of operations dates and their respective indices are presented below:

 

Fund		Commencement of Operations		Index
Biotech ETF		December 20, 2011		MVISTM US Listed Biotech 25 Index*
Environmental Services ETF**		October 10, 2006		NYSE Arca Environmental Services Index
Gaming ETF**		January 22, 2008		MVISTM Global Gaming Index*
Generic Drugs ETF		January 12, 2016		Indxx Global Generics & New Pharma Index
Pharmaceutical ETF		December 20, 2011		MVISTM US Listed Pharmaceutical 25 Index*
Retail ETF		December 20, 2011		MVISTM US Listed Retail 25 Index*
Semiconductor ETF		December 20, 2011		MVISTM US Listed Semiconductor 25 Index*

 

*	Published by MV Index Solutions GmbH
**	Effective January 1, 2012, the Fund changed its fiscal year end from December 31 to September 30.

 

Note 2—Significant Accounting Policies—The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

 

The 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 carried 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 more than sixty days remaining to maturity are valued at market value. 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. Securities for which quotations are not available are stated at fair value as determined by the Pricing Committee of the Adviser. The Pricing Committee 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

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

of financial instruments for which market prices are not readily available. 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, 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 were 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. 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, 2016 are reflected in the Schedules of Investments.
G.	Use of Derivative Instruments—The Funds may invest in derivative instruments, including, but not limited to, options, futures, swaps and other derivatives relating to foreign currency transactions. A derivative is an instrument whose value is derived from underlying assets, indices, reference rates or a combination of these factors. Derivative instruments may be privately negotiated contracts (often referred to as over-the-counter (“OTC”) derivatives) or they may be listed and traded on an exchange. Derivative contracts may involve future commitments to purchase or sell financial instruments at specified terms on a specified date, or to exchange interest payment streams or currencies based on a notional or contractual amount. Derivative instruments may involve a high degree of financial risk. The use of derivative instruments also involves the risk of loss if the Adviser is incorrect in its expectation of the timing or level of fluctuations in securities prices, interest rates or currency prices. Investments in derivative instruments also include the risk of default by the counterparty, the risk that the investment may not be liquid and the risk that a small movement in the price of the underlying security or benchmark may result in a disproportionately large movement, unfavorable or favorable, in the price of the derivative instruments. The Funds held no derivative instruments during the period ended March 31, 2016.
H.	Offsetting Assets and Liabilities—In the ordinary course of business, the Funds enter into transactions subject to enforceable master netting agreements 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, 2016 is presented in the Schedules of Investments. Refer to related disclosures in Note 2F (Repurchase Agreements) and Note 9 (Securities Lending).
I.	Other—Security transactions are accounted for on trade date. Transactions in certain securities may take longer than the customary settlement cycle to be completed. The counterparty is required to collateralize such trades with cash in excess of the market value of the transaction, which is held at the custodian and marked to market daily. Realized gains and losses are calculated on the identified cost basis. 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/rate. 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, at least until February 1, 2017, to voluntarily waive or limit its fees and to assume as its own certain expenses otherwise payable by the Funds so that each Fund’s total annual operating expenses do not exceed the expense limitations (excluding acquired fund fees and expenses, interest expense, trading expenses, offering costs, taxes and extraordinary expenses) listed in the table below.

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

The current expense limitations, management fee rates and the amounts waived/assumed by the Adviser for the period ended March 31, 2016, are as follows:

 

		Expense				Management				Waiver of				Expenses Assumed
Fund		Limitations				Fee Rates				Management Fees				by the Adviser
Biotech ETF			0.35	%			0.35	%			$143,389				$	—
Environmental Services ETF			0.55				0.50				35,854					—
Gaming ETF			0.65				0.50				48,295					—
Generic Drugs ETF			0.55				0.50				2,587					30,591
Pharmaceutical ETF			0.35				0.35				85,595					—
Retail ETF			0.35				0.35				62,709					—
Semiconductor ETF			0.35				0.35				87,133					—

 

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, 2016, 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
Biotech ETF			$67,995,975				$69,986,644
Environmental Services ETF			2,436,786				2,534,810
Gaming ETF			3,945,600				5,253,988
Generic Drugs ETF			1,071,401				462,305
Pharmaceutical ETF			34,985,300				35,601,060
Retail ETF			5,653,228				8,108,893
Semiconductor ETF			69,939,257				73,433,931

 

Note 5—Income Taxes—As of March 31, 2016, 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:

 

														Net Unrealized
						Gross Unrealized				Gross Unrealized				Appreciation
Fund		Cost of Investments				Appreciation				Depreciation				(Depreciation)
Biotech ETF		$	664,278,227			$	2,638,003			$	(130,386,454	)		$	(127,748,451	)
Environmental Services ETF			15,319,470				2,811,309				(861,569	)			1,949,740
Gaming ETF			26,955,220				1,805,994				(7,700,981	)			(5,894,987	)
Generic Drugs ETF			2,572,884				93,574				(182,286	)			(88,712	)
Pharmaceutical ETF			337,345,122				177,700				(64,199,418	)			(64,021,718	)
Retail ETF			149,788,136				5,418,480				(12,447,228	)			(7,028,748	)
Semiconductor ETF			216,158,575				1,881,881				(16,331,304	)			(14,449,423	)

 

The tax character of dividends paid to shareholders during the year ended September 30, 2015 was as follows:

 

Fund		Ordinary Income
Biotech ETF		$	—
Environmental Services ETF			263,000
Gaming ETF			1,789,800
Pharmaceutical ETF			6,396,063
Retail ETF			690,116
Semiconductor ETF			6,554,432

 

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

 

 

At September 30, 2015, the Funds had capital loss carryforwards available to offset future capital gains, as follows:

 

		Post-Effective-
		No Expiration				Post-Effective-
		Short-Term				No Expiration
		Capital				Long-Term				Amount Expiring in the Year Ended September 30,
Fund		Losses				Capital Losses				2018				2017				2016
Biotech ETF		$	1,053,288			$	3,548,781			$	—			$	—			$	—
Environmental Services ETF			534,238				5,581,983				479,375				6,445,705				2,110,133
Gaming ETF			2,252,454				88,498				—				—				—
Retail ETF			963,801				55,542				—				—				—
Semiconductor ETF			663,985				383,520				—				—				—

 

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

 

The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the period ended March 31, 2016, the Funds did not incur any interest or penalties.

 

Note 6—Capital Share Transactions—As of March 31, 2016, there were an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Shares are issued and redeemed by the Funds only in Creation Units, or multiples thereof, as follows:

 

Fund		Creation Units
Biotech ETF			50,000
Environmental Services ETF			50,000
Gaming ETF			50,000
Generic Drugs ETF			100,000
Pharmaceutical ETF			50,000
Retail ETF			50,000
Semiconductor ETF			50,000

 

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 plus a small amount of cash. For the period ended March 31, 2016, the Funds had in-kind contributions and redemptions as follows:

 

Fund		In-Kind Contributions				In-Kind Redemptions
Biotech ETF		$	51,346,767			$	126,721,869
Environmental Services ETF			—				—
Gaming ETF			—				5,765,208
Generic Drugs ETF			1,918,827				—
Pharmaceutical ETF			233,823,302				265,246,233
Retail ETF			77,111,784				146,709,177
Semiconductor ETF			2,452,414,448				2,488,556,650

 

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 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 occurrence affecting these issuers. The Funds may purchase securities on foreign exchanges. Securities of foreign

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

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.

 

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 collateral interest earned 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, 2016 are presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities.

 

Effective October 1, 2015, the Funds adopted new accounting guidance under Accounting Standards Update No. 2014-11, Transfers and Servicing (Topic 860) Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosure, which requires expanded disclosures related to financial assets pledged in secured financing transactions, such as securities lending, and the related contractual maturity terms of these secured transactions. Accordingly, the following table presents repurchase agreements held as collateral by type of security on loan pledged as of March 31, 2016:

 

		Gross Amount of Recognized
		Liabilities for Securities Loaned
		in the Statements of Assets
		and Liabilities*
Fund		Equity Securities
Biotech ETF			$17,977,822
Environmental Services ETF			1,041,744
Gaming ETF			674,455
Generic Drugs ETF			75,533
Pharmaceutical ETF			23,006,396
Retail ETF			2,062,277
Semiconductor ETF			7,708,284

 

*	Remaining contractual maturity of the agreements: overnight and continuous

 

Note 10—Share Split—On January 27, 2012, the Board of Trustees of the VanEck Vectors ETF Trust approved a split of the shares for Biotech ETF, Pharmaceutical ETF, and Retail ETF. The share splits took place for shareholders of record as of the close of business on February 10, 2012, and were paid on February 13, 2012. Each Fund’s shares began

 

 

trading on a split-adjusted basis on February 14, 2012. Biotech ETF and Retail ETF split its shares three-for-one. Pharmaceutical ETF split its shares two-for-one.

 

Note 11—Bank Line of Credit—Certain Funds may participate in a $200 million committed credit facility (the “Facility”) to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of the Funds at the request of the shareholders and other temporary or emergency purposes. The Funds have agreed to pay commitment fees, pro rata, based on the unused but available balance. Interest is charged to the Funds at rates based on prevailing market rates in effect at the time of borrowings. During the period ended March 31, 2016, the following Funds borrowed under this Facility:

 

														Outstanding Loan
		Days				Average Daily				Average				Balance as of
Fund		Outstanding				Loan Balance				Interest Rate				March 31, 2016
Biotech ETF			155			$	828,474				1.65	%		$	—
Environmental Services ETF			4				721,137				1.53				—
Gaming ETF			158				153,637				1.66				168,028
Pharmaceutical ETF			93				1,224,017				1.68				870,887
Retail ETF			36				178,712				1.71				316,568
Semiconductor ETF			72				533,000				1.59				—

 

Note 12—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, 2016, there were no offsets to custodian fees.

 

Note 13—Subsequent Events—The Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.

 

The following dividend from net investment income was declared and paid subsequent to March 31, 2016:

 

Fund		Ex-Date		Record Date		Payable Date		Per Share
Pharmaceutical ETF		4/1/16		4/5/16		4/7/16		$0.627

 

Effective May 1, 2016, Van Eck Global and all of its businesses and investment offerings will operate under the single global brand VanEck. Accordingly, the Registrant and each Fund will be renamed as follows:

 

Current Registrant Name/Current Fund Name		New Registrant Name/New Fund Name, effective May 1, 2016
Market Vectors® ETF Trust		VanEck VectorsTM ETF Trust
Market Vectors® Biotech ETF		VanEck VectorsTM Biotech ETF
Market Vectors® Environmental Services ETF		VanEck VectorsTM Environmental Services ETF
Market Vectors® Gaming ETF		VanEck VectorsTM Gaming ETF
Market Vectors® Generic Drugs ETF		VanEck VectorsTM Generic Drugs ETF
Market Vectors® Pharmaceutical ETF		VanEck VectorsTM Pharmaceutical ETF
Market Vectors® Retail ETF		VanEck VectorsTM Retail ETF
Market Vectors® Semiconductor ETF		VanEck VectorsTM Semiconductor ETF

 

Effective May 1, 2016, Market Vectors Index Solutions GmbH, index provider to several of the Funds, will adopt a new name and be known as MV Index Solutions GmbH (“MVIS”). The Funds’ indices will be renamed accordingly as follows below. The concept, methodology and identifier of the MVIS indices are not affected and remain unchanged.

 

Fund Name		Current Index Name		New Index Name, effective May 1, 2016
VanEck Vectors Biotech ETF		Market Vectors® US Listed Biotech 25 Index		MVISTM US Listed Biotech 25 Index
VanEck Vectors Gaming ETF		Market Vectors® Global Gaming Index		MVISTM Global Gaming Index
VanEck Vectors Pharmaceutical ETF		Market Vectors® US Listed Pharmaceutical 25 Index		MVISTM US Listed Pharmaceutical 25 Index
VanEck Vectors Retail ETF		Market Vectors® US Listed Retail 25 Index		MVISTM US Listed Retail 25 Index
VanEck Vectors Semiconductor ETF		Market Vectors® US Listed Semiconductor 25 Index		MVISTM US Listed Semiconductor 25 Index

VANECK VECTORS ETF TRUST

APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT

March 31, 2016 (unaudited)

 

At a meeting held on September 3, 2015 (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 Generic Drugs 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 information obtained through discussions with the Adviser at the Meeting regarding the management of the Fund, information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others proposed to be involved in the management and administration of the Fund. The Trustees also considered the terms and scope of services that the Adviser would provide under the Investment Management Agreement, including the Adviser’s commitment to waive certain fees and/or pay expenses of the Fund to the extent necessary to prevent the operating expenses of the Fund from exceeding agreed upon limits for a period of at least one year following the effective date of the Fund’s registration statement.

 

The Trustees considered the benefits, other than the fees under the Investment Management Agreement, that the Adviser would receive from serving as adviser to the Fund, including any benefits it may receive from serving as administrator to the Fund and from an affiliate of the Adviser serving as distributor 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.

 

*	Prior to May 1, 2016, the Trust’s name was Market Vectors ETF Trust.
**	Prior to May 1, 2016, the Fund’s name was Market Vectors Generic Drugs ETF.

 

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		VVINDUSSAR

SEMI-ANNUAL REPORT March 31, 2016 (unaudited)

 

 

 

 

VANECK VECTORS^TM

STRATEGIC EQUITY ETFs

 

 

Global Spin-Off ETF	SPUN®
Morningstar International Moat ETF	MOTI®
Morningstar Wide Moat ETF	MOAT®

 

800.826.2333

vaneck.com

 

 

VANECK VECTORS STRATEGIC EQUITY ETFs
President’s Letter	1
Management Discussion	3
Performance Comparison
Global Spin-Off ETF	4
Morningstar International Moat ETF	5
Morningstar Wide Moat ETF	6
Explanation of Expenses	7
Schedule of Investments
Global Spin-Off ETF	8
Morningstar International Moat ETF	11
Morningstar Wide Moat ETF	14
Statements of Assets and Liabilities	16
Statements of Operations	17
Statements of Changes in Net Assets	18
Financial Highlights
Global Spin-Off ETF	20
Morningstar International Moat ETF	20
Morningstar Wide Moat ETF	21
Notes to Financial Statements	22

 

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, 2016, and are subject to change.

VANECK VECTORS STRATEGIC EQUITY ETFs

(unaudited)

 

Dear Shareholder:

 

Effective as of May 1, 2016, the Market Vectors exchange-traded funds are now known as VanEck Vectors ETFs.

 

We are pleased to present this semi-annual report for the three strategic equity exchange-traded funds (ETFs) of the VanEck Vectors ETF Trust for the six month period ended March 31, 2016.

 

Sustainable Competitive Advantages

 

Our strategic equity ETFs seek to track rules-based indices that systematically screen for stocks that meet specific criteria; for example, in the case of the VanEck Vectors Morningstar Wide Moat ETF (NYSE Arca: MOAT) and VanEck Vectors Morningstar International Moat ETF (NYSE Arca: MOTI), companies Morningstar believes possess sustainable competitive advantages and exhibit attractive valuations. In the case of the VanEck Vectors Global Spin-Off ETF (NYSE Arca: SPUN), Horizon Kinetics Global Spin-Off Index’s¹ unique eligibility methodology provides for spin-offs to be eligible to enter the index early in their life cycle and remain in it for five years following their addition.

 

We continue to believe that investors looking to make long-term allocations to broad asset classes, such as U.S. equity markets, may find that these strategic approaches offer an attractive way to enhance exposure to core asset classes.

 

In the context of a long-term allocation to the U.S. equity market, the Morningstar^® Wide Moat Focus Index^{SM 2}—the index MOAT seeks to replicate—continues to feature an impressive batting average measured against the S&P 500^® Index,³ particularly over long-term holding periods. As of March 31, illustrating the success of Morningstar’s process of identifying attractively priced companies with sustainable competitive advantages, the Wide Moat Focus Index had outperformed the S&P 500 Index 57% of the time for periods of six months and 60% of the time for periods of one year.

 

Batting Average Shows the Percent of Time Morningstar Wide Moat Focus Index
Outperformed the S&P 500 Index

 

Monthly Frequency: 3/2007 – 3/2016

 

 

			1 Month Rolling Periods			6 Month Rolling Periods			1 Year Rolling Periods			3 Year Rolling Periods			5 Year Rolling Periods
	Total Periods		109			104			98			74			50
	Total Outperformed		53			59			59			59			45
	Batting Average		49	%		57	%		60	%		80	%		90	%

 

Source: Morningstar, FactSet. Batting Average is measured by dividing the number of periods a portfolio or investment strategy outperforms a benchmark by the total number of periods.

 

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. Index performance is not illustrative of fund performance. Investors cannot invest directly in an Index.

VANECK VECTORS STRATEGIC EQUITY ETFs

(unaudited)

 

Please stay in touch with us through our website (www.vaneck.com) on which we offer videos, email subscriptions, blogs, and educational literature. Should you have any questions, please contact us at 800.826.2333 or visit www.vaneck.com/etfs.

 

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, 2016. 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 27, 2016

 

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.

 

All indices are unmanaged and include the reinvestment of all dividends, but do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in a fund. An index’s performance is not illustrative of a fund’s performance. Indices are not securities in which investments can be made. Results reflect past performance and do not guarantee future results.

 

1	Horizon Kinetics Global Spin-Off Index (GSPIN) is a rules-based, equal-weighted index intended to track the performance of listed, publicly held spin-offs that are domiciled and trade in the U.S. or developed markets of Western Europe and Asia.
2	Morningstar® Wide Moat Focus IndexSM (MWMFTR) is a rules-based, equal-weighted index that is intended to offer exposure to companies that have sustainable competitive advantages according to Morningstar analysts
3	S&P 500® Index consists of 500 widely held common stocks covering the leading industries in the U.S. economy.

 

 

Management Discussion (unaudited)

 

All three VanEck Vectors Strategic Equity ETFs traded for the full six month period. All returned positive performance.

 

 

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 Wide Moat

 

For the six month period, VanEck Vectors Morningstar Wide Moat ETF returned 12.36% and outperformed the S&P 500^® Index¹ by 3.88%. The primary drivers of performance were the Fund’s exposures to the information technology (in particular, Autodesk, Inc. and Applied Materials, Inc. (both holdings sold by end of period), industrials (electrical equipment and railroad companies), and information technology sectors. Only two sectors detracted from the Fund’s performance: financial and healthcare companies.

 

Morningstar International Moat

 

For the six month period the VanEck Vectors Morningstar International Moat ETF returned 4.98%. The primary driver of the Fund’s performance was the industrials sector. Companies in the financials sector also contributed solid positive performance. Only three sectors detracted from performance: telecommunications, materials, and consumer staples. Of these three, telecommunications detracted by far the most.

 

Global Spin-Off

 

The VanEck Vectors Global Spin-Off ETF returned 5.61% for the six month period. During this period, U.S. companies were the largest contributors to the Fund’s total returns. The two sectors contributing the most to performance were materials and industrials. The consumer discretionary and energy sectors were the only two negative contributors to the Fund’s performance. Spin-off companies in China were the largest detractors from performance.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index.

 

1	S&P 500® Index consists of 500 widely held common stocks covering the industrial, utility, financial, and transportation sectors.

GLOBAL SPIN-OFF ETF

PERFORMANCE COMPARISON

March 31, 2016 (unaudited)

 

Total Return		Share Price1				NAV				GSPIN2
Six Months			5.47	%			5.61	%			6.00	%
Life* (cumulative)			(9.08	)%			(9.34	)%			(8.97	)%

*	since 6/9/2015

 

Commencement date for the VanEck Vectors Global Spin-Off ETF was 6/9/15.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (6/9/15) to the first day of secondary market trading in shares of the Fund (6/10/15), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.

 

Gross Expense Ratio 5.89% / Net Expense Ratio 0.55%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.55% of the Fund’s average daily net assets per year until at least February 1, 2017. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.

 

The “Net Asset Value” (NAV) of a VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. 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.

 

2	Horizon Kinetics Global Spin-Off Index (GSPIN) is a rules-based, equal-weighted index intended to track the performance of listed, publicly-held spin-offs that are domiciled and trade in the U.S. or developed markets of Western Europe and Asia.

 

Horizon Kinetics Global Spin-Off Index was created and is maintained by Horizon Kinetics LLC. Horizon Kinetics LLC does not sponsor, endorse, issue, sell, or promote the VanEck Vectors Global Spin-Off ETF and bears no liability with respect to that ETF or any security.

MORNINGSTAR INTERNATIONAL MOAT ETF

PERFORMANCE COMPARISON

March 31, 2016 (unaudited)

 

Total Return		Share Price1				NAV				MGEUMFUN2
Six Months			4.94	%			4.98	%			5.91	%
Life* (cumulative)			(7.93	)%			(7.86	)%			(6.94	)%

*	since 7/13/2015

 

Commencement date for the VanEck Vectors Morningstar International ETF was 7/13/15.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (7/13/15) to the first day of secondary market trading in shares of the Fund (7/14/15), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.

 

Gross Expense Ratio 1.70% / Net Expense Ratio 0.56%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.56% of the Fund’s average daily net assets per year until at least February 1, 2017. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.

 

The “Net Asset Value” (NAV) of a VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. 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.

 

2

Morningstar® Global ex-US Moat Focus IndexSM (MGEUMFUN) is a rules-based, equal-weighted index intended to offer exposure to companies that Morningstar, Inc. determines have sustainable competitive advantages based on a proprietary methodology that considers quantitative and qualitative factors (“wide and narrow moat companies”).

 

The Morningstar^® Global ex-US Moat Focus Index^SM was created and is maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck Vectors Morningstar International Moat ETF and bears no liability with respect to that ETF or any security. Morningstar^® is a registered trademark of Morningstar, Inc. Morningstar^® Global ex-US Moat Focus Index^SM is a service mark of Morningstar, Inc.

MORNINGSTAR WIDE MOAT ETF

PERFORMANCE COMPARISON

March 31, 2016 (unaudited)

 

Total Return		Share Price1				NAV				MWMFTR2
Six Months			12.45	%			12.36	%			12.79	%
One Year			3.62	%			3.61	%			4.27	%
Life* (annualized)			12.72	%			12.73	%			13.29	%
Life* (cumulative)			60.15	%			60.20	%			63.39	%

*	since 4/24/2012

 

Commencement date for the VanEck Vectors Morningstar Wide Moat ETF was 4/24/12.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (4/24/12) to the first day of secondary market trading in shares of the Fund (4/25/12), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.

 

Gross Expense Ratio 0.50% / Net Expense Ratio 0.49%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.49% of the Fund’s average daily net assets per year until at least February 1, 2017. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.

 

The “Net Asset Value” (NAV) of a VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. 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.

 

2

Morningstar® Wide Moat Focus IndexSM (MWMFTR) is a rules-based, equal-weighted index intended to offer exposure to companies that Morningstar, Inc. determines have sustainable competitive advantages based on a proprietary methodology that considers quantitative and qualitative factors (“wide moat companies”).

 

The Morningstar^® Wide Moat Focus Index^SM was created and is maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck Vectors Morningstar Wide Moat ETF and bears no liability with respect to that ETF or any security. Morningstar^® is a registered trademark of Morningstar, Inc. Morningstar^® Wide Moat Focus Index^SM is a service mark of Morningstar, Inc.

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, 2015 to March 31, 2016.

 

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 your 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 program fees. 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				Ending				Annualized				Expenses Paid
		Account				Account				Expense				During the Period*
		Value				Value				Ratio				October 1, 2015-
		October 1, 2015				March 31, 2015				During Period				March 31, 2015
Global Spin-Off ETF
Actual		$	1,000.00			$	1,056.10				0.55	%		$	2.83
Hypothetical**		$	1,000.00			$	1,022.25				0.55	%		$	2.78
Morningstar International Moat ETF
Actual		$	1,000.00			$	1,049.80				0.56	%		$	2.87
Hypothetical**		$	1,000.00			$	1,022.20				0.56	%		$	2.83
Morningstar Wide Moat ETF
Actual		$	1,000.00			$	1,123.60				0.49	%		$	2.60
Hypothetical**		$	1,000.00			$	1,022.55				0.49	%		$	2.48

*	Expenses are equal to the Fund’s annualized expense ratio (for the six months ended March 31, 2016) 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

GLOBAL SPIN-OFF ETF

SCHEDULE OF INVESTMENTS

March 31, 2016 (unaudited)

 

 

See Notes to Financial Statements

 

 

 

USD	United States Dollar
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $148,199.
#	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 $437,688 which represents 16.4% 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 (unaudited)		% of Investments				Value
Consumer Discretionary			25.3	%		$	681,899
Consumer Staples			4.7				125,546
Energy			7.7				205,618
Financials			21.1				568,721
Health Care			8.1				218,090
Industrials			15.0				404,414
Information Technology			10.5				283,211
Materials			4.5				121,905
Telecommunication Services			1.2				31,856
Utilities			1.2				32,261
Money Market Fund			0.7				17,775
			100.0	%		$	2,691,296

 

See Notes to Financial Statements

GLOBAL SPIN-OFF ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

The summary of inputs used to value the Fund’s investments as of March 31, 2016 is as follows:

 

					Level 2					Level 3
		Level 1			Significant					Significant
		Quoted			Observable					Unobservable
		Prices			Inputs					Inputs					Value
Common Stocks
Australia		$	—			$	125,085				$	—			$	125,085
Cayman Islands			31,528				—					—				31,528
China / Hong Kong			—				63,242					—				63,242
Finland			—				62,068					—				62,068
France			31,017				—					—				31,017
Germany			—				31,506					—				31,506
Ireland			61,765				—					—				61,765
New Zealand			—				31,856					—				31,856
Norway			—				30,784					—				30,784
Spain			—				30,413					—				30,413
Switzerland			—				31,748					—				31,748
United Kingdom			—				30,986					—				30,986
United States			1,697,086				—					—				1,697,086
Real Estate Investment Trusts*			414,437				—					—				414,437
Money Market Fund			17,775				—					—				17,775
Repurchase Agreement			—				152,344					—				152,344
Total		$	2,253,608			$	590,032				$	—			$	2,843,640

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

During the period ended March 31, 2016, transfers of securities from Level 2 to Level 1 were $32,629. 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

MORNINGSTAR INTERNATIONAL MOAT ETF

SCHEDULE OF INVESTMENTS

March 31, 2016 (unaudited)

 

 

See Notes to Financial Statements

MORNINGSTAR INTERNATIONAL MOAT ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

AUD	Australian Dollar
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $169,447.
#	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 $9,211,500 which represents 83.5% of net assets.
§	Illiquid Security—the aggregate value of illiquid securities is $2,101 which represents 0.0% of net assets.

Summary of Investments by Sector Excluding Collateral for Securities Loaned (unaudited)		% of Investments				Value
Consumer Discretionary			14.0	%		$	1,567,937
Consumer Staples			1.9				210,227
Energy			4.0				451,684
Financials			46.8				5,239,333
Health Care			11.3				1,267,914
Industrials			8.0				897,464
Materials			2.1				233,867
Telecommunication Services			6.1				679,754
Utilities			4.2				464,213
Money Market Fund			1.6				177,222
			100.0	%		$	11,189,615

 

The summary of inputs used to value the Fund’s investments as of March 31, 2016 is as follows:

 

					Level 2					Level 3
		Level 1			Significant					Significant
		Quoted			Observable					Unobservable
		Prices			Inputs					Inputs					Value
Common Stocks
Australia		$	—			$	654,325				$	—			$	654,325
Belgium			—				205,465					—				205,465
Brazil			226,117				—					—				226,117
Canada			1,574,776				—					—				1,574,776
Chile			—				—					2,101				2,101
China / Hong Kong			—				2,243,181					—				2,243,181
France			—				1,286,063					—				1,286,063
Germany			—				233,867					—				233,867
Israel			—				199,312					—				199,312
Netherlands			—				230,707					—				230,707
New Zealand			—				246,286					—				246,286
Russia			—				229,741					—				229,741
Singapore			—				668,486					—				668,486
Spain			—				214,553					—				214,553
Sweden			—				216,245					—				216,245
Switzerland			—				1,260,163					—				1,260,163
United Kingdom			—				1,089,331					—				1,089,331
Real Estate Investment Trusts
Singapore			—				224,499					—				224,499
Rights
Australia			—				7,175					—				7,175
Money Market Fund			177,222				—					—				177,222
Repurchase Agreement			—				170,118					—				170,118
Total		$	1,978,115			$	9,379,517				$	2,101			$	11,359,733

 

There were no transfers between levels during the period ended March 31, 2016.

 

See Notes to Financial Statements

 

 

The following table reconciles the valuation of the Fund’s Level 3 investment securities and related transactions during the period ended March 31, 2016:

 

		Common Stocks
		Chile
Balance as of September 30, 2015			$	—
Realized gain (loss)				—
Net change in unrealized appreciation (depreciation)				127
Purchases				1,974
Sales				—
Transfers in and/or out of level 3				—
Balance as of March 31, 2016			$	2,101

 

See Notes to Financial Statements

MORNINGSTAR WIDE MOAT ETF

SCHEDULE OF INVESTMENTS

March 31, 2016 (unaudited)

 

 

 

*	Non-income producing

 

Summary of Investments by Sector (unaudited)		% of Investments				Value
Consumer Discretionary			5.0	%		$	33,747,127
Financials			25.2				171,084,703
Health Care			39.3				266,960,902
Industrials			10.4				70,545,259
Information Technology			15.3				104,058,929
Materials			4.8				32,819,849
			100.0	%		$	679,216,769

 

The summary of inputs used to value the Fund’s investments as of March 31, 2016 is as follows:

 

Level 2

Level 3

Level 1

Significant

Significant

Quoted

Observable

Unobservable

Prices

Inputs

Inputs

Value

Common Stocks*

$

679,216,769

$

—

$

—

$

679,216,769

*	See Schedule of Investments for security type and industry sector breakouts.

 

There were no transfers between levels during the period ended March 31, 2016.

 

See Notes to Financial Statements

[This page intentionally left blank.]

VANECK VECTORS ETF TRUST

STATEMENTS OF ASSETS AND LIABILITIES

March 31, 2016 (unaudited)

 

							Morningstar
		Global					International					Morningstar
		Spin-Off ETF					Moat ETF					Wide Moat ETF
Assets:
Investments, at value (1) (2)			$	2,691,296				$	11,189,615				$	679,216,769
Short-term investments held as collateral for securities loaned (3)				152,344					170,118					—
Cash denominated in foreign currency, at value (4)				853					—					—
Receivables:
Investment securities sold				475,706					216,750					—
Due from Adviser				9,702					4,185					—
Dividends				8,844					75,281					1,190,576
Prepaid expenses				1,253					1,095					9,258
Total assets				3,339,998					11,657,044					680,416,603
Liabilities:
Payables:
Investment securities purchased				478,886					424,040					1,634
Collateral for securities loaned				152,344					170,118					—
Line of credit				—					—					1,859,220
Due to Adviser				—					—					250,397
Deferred Trustee fees				9					33					23,742
Accrued expenses				35,902					35,116					119,698
Total liabilities				667,141					629,307					2,254,691
NET ASSETS			$	2,672,857				$	11,027,737				$	678,161,912
Shares outstanding				150,000					400,000					22,050,000
Net asset value, redemption and offering price per share			$	17.82				$	27.57				$	30.76
Net assets consist of:
Aggregate paid in capital			$	2,826,978				$	12,090,894				$	814,212,718
Net unrealized depreciation				(119,353	)				(300,915	)				(4,683,026	)
Undistributed net investment income				21,374					54,617					4,279,091
Accumulated net realized loss				(56,142	)				(816,859	)				(135,646,871	)
			$	2,672,857				$	11,027,737				$	678,161,912
(1) Value of securities on loan			$	148,199				$	169,447				$	—
(2) Cost of investments			$	2,810,705				$	11,491,013				$	683,899,795
(3) Cost of short-term investments held as collateral for securities loaned			$	152,344				$	170,118				$	—
(4) Cost of cash denominated in foreign currency			$	814				$	—				$	—

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF OPERATIONS

For the Six Months Ended March 31, 2016 (unaudited)

 

							Morningstar
		Global					International					Morningstar
		Spin-Off ETF					Moat ETF					Wide Moat ETF
Income:
Dividends			$	37,872				$	133,680				$	8,959,434
Securities lending income				718					1,892					17,184
Foreign taxes withheld				(627	)				(15,439	)				—
Total income				37,963					120,133					8,976,618
Expenses:
Management fees				6,396					26,615					1,611,476
Professional fees				23,960					21,108					59,892
Insurance				16					—					7,318
Trustees’ fees and expenses				638					717					14,696
Reports to shareholders				11,241					8,960					43,859
Indicative optimized portfolio value fee				6,836					6,334					2,463
Custodian fees				18,252					18,630					22,601
Registration fees				3,839					3,806					12,622
Transfer agent fees				1,271					1,262					937
Fund accounting fees				2,690					2,853					21,892
Interest				—					—					4,671
Other				250					270					2,124
Total expenses				75,389					90,555					1,804,551
Waiver of management fees				(6,396	)				(26,615	)				(45,162	)
Expenses assumed by the Adviser				(61,958	)				(34,131	)				—
Net expenses				7,035					29,809					1,759,389
Net investment income				30,928					90,324					7,217,229
Net realized gain (loss) on:
Investments				(16,782	)				(452,532	)				(21,354,730	)
In-kind redemptions				—					—					30,617,231
Foreign currency transactions and foreign denominated assets and liabilities				(12	)				(7,011	)				—
Net realized gain (loss)				(16,794	)				(459,543	)				9,262,501
Net change in unrealized appreciation (depreciation) on:
Investments				128,435					894,543					55,559,288
Foreign currency transactions and foreign denominated assets and liabilities				65					1,021					—
Net change in unrealized appreciation (depreciation)				128,500					895,564					55,559,288
Net Increase in Net Assets Resulting from Operations			$	142,634				$	526,345				$	72,039,018

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

												Morningstar
		Global Spin-Off ETF										International Moat ETF
							For the Period										For the Period
		For the Six					June 9, 2015*					For the Six					July 13, 2015*
		Months Ended					through					Months Ended					through
		March 31,					September 30,					March 31,					September 30,
		2016					2015					2016					2015
		(unaudited)										(unaudited)
Operations:
Net investment income			$	30,928				$	7,232				$	90,324				$	70,662
Net realized gain (loss)				(16,794	)				(39,484	)				(459,543	)				(373,685	)
Net change in unrealized appreciation (depreciation)				128,500					(247,853	)				895,564					(1,196,479	)
Net increase (decrease) in net assets resulting from operations				142,634					(280,105	)				526,345					(1,499,502	)
Dividends to shareholders:
Dividends from net investment income				(16,650	)				—					(90,000	)				—
Share transactions:**
Proceeds from sale of shares				—					2,826,978					—					12,090,894
Cost of shares redeemed				—					—					—					—
Increase (Decrease) in net assets resulting from share transactions				—					2,826,978					—					12,090,894
Total increase (decrease) in net assets				125,984					2,546,873					436,345					10,591,392
Net Assets, beginning of period				2,546,873					—					10,591,392					—
Net Assets, end of period†			$	2,672,857				$	2,546,873				$	11,027,737				$	10,591,392
† Including undistributed net investment income			$	21,374				$	7,096				$	54,617				$	54,293
** Shares of Common Stock Issued (no par value)
Shares sold				—					150,000					—					400,000
Shares redeemed				—					—					—					—
Net increase (decrease)				—					150,000					—					400,000

 

*	Commencement of operations

 

See Notes to Financial Statements

 

 

Morningstar Wide Moat ETF
For the Six					For the Year
Months Ended					Ended
March 31,					September 30,
2016					2015
(unaudited)
	$	7,217,229				$	16,873,747
		9,262,501					(38,373,256	)
		55,559,288					(58,131,508	)
		72,039,018					(79,631,017	)
		(15,301,600	)				(13,000,000	)
		269,000,751					159,367,725
		(389,939,788	)				(177,988,761	)
		(120,939,037	)				(18,621,036	)
		(64,201,619	)				(111,252,053	)
		742,363,531					853,615,584
	$	678,161,912				$	742,363,531
	$	4,279,091				$	12,363,462
		9,050,000					5,100,000
		(13,550,000	)				(5,850,000	)
		(4,500,000	)				(750,000	)

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		Global Spin-Off ETF
		For the Six					For the Period
		Months					June 9, 2015(a)
		Ended					through
		March 31,					September 30,
		2016					2015
		(unaudited)
Net asset value, beginning of period				$16.98					$19.78
Income from investment operations:
Net investment income				0.21					0.05
Net realized and unrealized gain (loss) on investments				0.74					(2.85	)
Total from investment operations				0.95					(2.80	)
Less:
Dividends from net investment income				(0.11	)				—
Net asset value, end of period				$17.82					$16.98
Total return (b)				5.61	%(c)				(14.16	)%(c)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$ 2,673					$ 2,547
Ratio of gross expenses to average net assets				5.89	%(d)				6.24	%(d)
Ratio of net expenses to average net assets				0.55	%(d)				0.55	%(d)
Ratio of net expenses, excluding interest expense, to average net assets				0.55	%(d)				0.55	%(d)
Ratio of net investment income to average net assets				2.42	%(d)				1.24	%(d)
Portfolio turnover rate				33	%(c)				30	%(c)
		Morningstar
		International Moat ETF
		For the Six					For the Period
		Months					July 13, 2015(a)
		Ended					through
		March 31,					September 30,
		2016					2015
		(unaudited)
Net asset value, beginning of period				$26.48					$30.17
Income from investment operations:
Net investment income				0.23					0.18
Net realized and unrealized gain (loss) on investments				1.09					(3.87	)
Total from investment operations				1.32					(3.69	)
Less:
Dividends from net investment income				(0.23	)				—
Net asset value, end of period				$27.57					$26.48
Total return (b)				4.98	%(c)				(12.23	)%(c)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$ 11,028					$ 10,591
Ratio of gross expenses to average net assets				1.70	%(d)				2.49	%(d)
Ratio of net expenses to average net assets				0.56	%(d)				0.56	%(d)
Ratio of net expenses, excluding interest expense, to average net assets				0.56	%(d)				0.56	%(d)
Ratio of net investment income to average net assets				1.70	%(d)				3.27	%(d)
Portfolio turnover rate				93	%(c)				54	%(c)

 

(a)	Commencement of operations
(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

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

		Morningstar Wide Moat ETF
		For the Six																For the Period
		Months																April 24,
		Ended																2012(a) through
		March 31,				For the Year Ended September 30,												September 30,
		2016				2015				2014				2013				2012
		(unaudited)
Net asset value, beginning of period			$27.96				$31.27				$27.09				$21.54				$20.15
Income from investment operations:
Net investment income			0.35				0.57				0.37				0.23				0.08
Net realized and unrealized gain (loss) on investments			3.07				(3.46	)			4.04				5.46				1.31
Total from investment operations			3.42				(2.89	)			4.41				5.69				1.39
Less:
Dividends from net investment income			(0.62	)			(0.42	)			(0.23	)			(0.14	)			—
Net asset value, end of period			$30.76				$27.96				$31.27				$27.09				$21.54
Total return (b)			12.36	%(c)			(9.41	)%			16.35	%			26.54	%			6.90	%(c)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$678,162				$742,364				$853,616				$364,395				$66,782
Ratio of gross expenses to average net assets			0.50	%(d)			0.50	%			0.50	%			0.51	%			1.04	%(d)
Ratio of net expenses to average net assets			0.49	%(d)			0.49	%			0.49	%			0.49	%			0.49	%(d)
Ratio of net expenses, excluding interest expense, to average net assets			0.49	%(d)			0.49	%			0.49	%			0.49	%			0.49	%(d)
Ratio of net investment income to average net assets			2.02	%(d)			1.88	%			1.63	%			1.48	%			1.62	%(d)
Portfolio turnover rate			124	%(c)			14	%			15	%			1	%			0	%(c)

 

(a)	Commencement of operations
(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

 

See Notes to Financial Statements

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

March 31, 2016 (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, 2016, offers fifty seven investment portfolios, each of which represents a separate series of the Trust.

 

These financial statements relate only to the following investment portfolios: Global Spin-Off ETF, Morningstar International Moat ETF and Morningstar Wide Moat ETF (each a “Fund” and, together, the “Funds”). Each Fund’s investment objective is to replicate as closely as possible, before fees and expenses, the price and yield performance of its index. Each Fund, using a “passive” or indexing investment approach, attempts to approximate the investment performance of its index by investing in a portfolio of securities that generally replicates the index.

 

The Funds’ commencement of operations dates and their respective indices are presented below:

 

		Commencement
Fund		of Operations		Index
Global Spin-Off ETF		June 9, 2015		Horizon Kinetics Global Spin-Off Index(1)
Morningstar International Moat ETF		July 13, 2015		Morningstar® Global ex-US Moat IndexSM(2)
Morningstar Wide Moat ETF		April 24, 2012		Morningstar® Wide Moat Focus IndexSM(2)

 

(1)	Published by Horizon Kinetics, LLC
(2)	Published by Morningstar, Inc.

 

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 carried 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. Securities for which quotations are not available are stated at fair value as determined by the Pricing Committee of Van Eck Associates Corporation (the “Adviser”). The Pricing Committee 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 for which market prices are not readily available. 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, 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 its investments on a recurring basis which includes a hierarchy that prioritizes inputs to valuation methods used to measure fair value. The fair value hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The transfers between levels of the fair value hierarchy assume the financial instruments were 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. 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.	Use of Derivative Instruments—The Funds may invest in derivative instruments, including, but not limited to, options, futures, swaps and other derivatives relating to foreign currency transactions. A derivative is an instrument whose value is derived from underlying assets, indices, reference rates or a combination of these factors. Derivative instruments may be privately negotiated contracts (often referred to as over-the-counter (“OTC”) derivatives) or they

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

	may be listed and traded on an exchange. Derivative contracts may involve future commitments to purchase or sell financial instruments at specified terms on a specified date, or to exchange interest payment streams or currencies based on a notional or contractual amount. Derivative instruments may involve a high degree of financial risk. The use of derivative instruments also involves the risk of loss if the Adviser is incorrect in its expectation of the timing or level of fluctuations in securities prices, interest rates or currency prices. Investments in derivative instruments also include the risk of default by the counterparty, the risk that the investment may not be liquid and the risk that a small movement in the price of the underlying security or benchmark may result in a disproportionately large movement, unfavorable or favorable, in the price of the derivative instruments. The Funds held no derivative instruments during the period ended March 31, 2016.
G.	Repurchase Agreements—The Funds may enter into repurchase agreements with financial institutions, deemed to be creditworthy by the Adviser, to generate income from their excess cash balances and to invest securities lending cash collateral. A repurchase agreement is an agreement under which a Fund acquires securities from a seller, subject to resale to the seller at an agreed upon price and date. A Fund, through its custodian/securities lending agent, takes possession of securities collateralizing the repurchase agreement. Pursuant to the terms of the repurchase agreement, such securities must have an aggregate market value greater than or equal to the terms of the repurchase price plus accrued interest at all times. If the value of the underlying securities falls below the value of the repurchase price plus accrued interest, the Funds will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults on its repurchase obligation, the Funds maintain their right to sell the underlying securities at market value and may claim any resulting loss against the seller. Repurchase agreements held as of March 31, 2016 are reflected in the Schedules of Investments.
H.	Offsetting Assets and Liabilities—In the ordinary course of business, the Funds enter into transactions subject to enforceable master netting agreements 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, 2016 is presented in the Schedules of Investments. Also, refer to related disclosures in Note 2G (Repurchase Agreements) and Note 9 (Securities Lending).
I.	Other—Security transactions are accounted for on trade date. Transactions in certain securities may take longer than the customary settlement cycle to be completed. The counterparty is required to collateralize such trades with cash in excess of the market value of the transaction, which is held at the custodian and marked to market daily. Realized gains and losses are calculated on the identified cost basis. 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/rate. 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, at least until February 1, 2017, to voluntarily waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Funds so that each Fund’s total annual operating expenses does not exceed the expense limitations (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) 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, 2016, are as follows:

 

		Management			Expense			Waiver of			Expenses Assumed
Fund		Fee Rate			Limitations			Management Fees			by the Adviser
Global Spin-Off ETF		0.50	%		0.55	%		$  6,396			$61,958
Morningstar International Moat ETF		0.50			0.56			26,615			34,131
Morningstar Wide Moat ETF		0.45			0.49			45,162			—

 

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, 2016, 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
Global Spin-Off ETF		$        881,586			$       862,594
Morningstar International Moat ETF		9,974,601			10,029,922
Morningstar Wide Moat ETF		885,691,716			897,894,420

 

Note 5—Income Taxes—As of March 31, 2016, for Federal income tax purposes, the identified cost of investments owned, net unrealized depreciation, gross unrealized appreciation, and gross unrealized depreciation of investments were as follows:

 

											Net Unrealized
					Gross Unrealized			Gross Unrealized			Appreciation
Fund		Cost of Investments			Appreciation			Depreciation			(Depreciation)
Global Spin-Off ETF		$    2,963,089			$    170,138			$    (289,587	)		$    (119,449	)
Morningstar International Moat ETF		11,670,035			237,090			(547,392	)		(310,302	)
Morningstar Wide Moat ETF		683,899,795			4,972,365			(9,655,391	)		(4,683,026	)

 

The tax character of dividends paid to shareholders during the year ended September 30, 2015 was as follows:

 

Fund	Ordinary Income
Morningstar Wide Moat ETF	$13,000,000

 

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

 

At September 30, 2015, 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
Global Spin-Off ETF		$        39,308			$                —
Morningstar International Moat ETF		348,431			—
Morningstar Wide Moat ETF		121,644,701			23,264,671

 

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

 

The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the period ended March 31, 2016, the Funds did not incur any interest or penalties.

VANECK VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

Note 6—Capital Share Transactions—As of March 31, 2016, there were an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Shares are issued and redeemed by the Funds only in 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 plus a small amount of cash. For the period ended March 31, 2016, the following Funds had in-kind contributions and redemptions:

 

Fund		In-Kind Contributions		In-Kind Redemptions
Morningstar Wide Moat ETF		$269,027,553		$382,360,457

 

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 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 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.

 

Global Spin-Off ETF may invest in spun-off 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.

 

Global 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.

 

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 collateral interest earned 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, 2016 are presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities.

 

Effective October 1, 2015, the Funds adopted new accounting guidance under Accounting Standards Update No. 2014-11 Transfers and Servicing (Topic 860) Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosure, which requires expanded disclosures related to financial assets pledged in secured financing transactions, such as securities lending, and the related contractual maturity terms of these secured transactions. Accordingly, the following table presents repurchase agreements held as collateral by type of security on loan pledged as of March 31, 2016:

 

		Gross amount of recognized
		liabilities for securities loaned
		in the Statements of Assets
		and Liabilities*
Fund		Equity Securities
Global Spin-Off ETF		$152,344
Morningstar International Moat ETF		170,118

 

*	Remaining contractual maturity of the agreements: overnight and continuous

 

Note 10—Bank Line of Credit—Certain Funds may participate in a $200 million committed credit facility (the “Facility”) to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of the Funds at the request of the shareholders and other temporary or emergency purposes. The Funds have agreed to pay commitment fees, pro rata, based on the unused but available balance. Interest is charged to the Funds at rates based on prevailing market rates in effect at the time of borrowings. During the period ended March 31, 2016, the following Funds borrowed under this Facility:

 

								Outstanding Loan
		Days		Average Daily		Average		Balance as of
Fund		Outstanding		Loan Balance		Interest Rate		March 31, 2016
Morningstar Wide Moat ETF		103		$943,971		1.66%		$1,859,220

 

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, 2016, there were no offsets to custodian fees.

 

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.

 

Effective May 1, 2016, Van Eck Global and all of its businesses and investment offerings will operate under the single global brand VanEck. Accordingly, the Registrant and each Fund will be renamed as follows:

 

Current Registrant Name/Current Fund Name		New Registrant Name/New Fund Name, effective May 1, 2016
Market Vectors® ETF Trust		VanEck VectorsTM ETF Trust
Market Vectors® Global Spin-Off ETF		VanEck VectorsTM Global Spin-Off ETF
Market Vectors® Morningstar International Moat ETF		VanEck VectorsTM Morningstar International Moat ETF
Market Vectors® Morningstar Wide Moat ETF		VanEck VectorsTM Morningstar Wide Moat ETF

 

 

 

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	VVSTRATSAR

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 second fiscal quarter of 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. 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 3, 2016
     ---------------

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 3, 2016
     ---------------

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

Date June 3, 2016
     ---------------