Key Takeaways

• AI is the trend to ride, in our view, with overweight positions real assets aim to capture the physical buildout.
• Bubble concerns can drive short-term sentiment, so we believe investors should focus on tuning out the noise.
• AI leadership changes every 6 to 8 weeks, so rather than pick winners, we focus on the power, metals and infrastructure every competitor needs.

The views expressed are for illustrative purposes only, subject to change without notice, do not constitute investment advice, recommendations or calls to action, and are those of the author(s) and not necessarily those of VanEck or its other employees. Past performance is no guarantee of future results.

AI is the biggest trend, in our view, and we will continue to ride it. The opportunity extends from the technology itself to the physical economy required to support it. Diversification gives us the flexibility to pursue both while managing risk.

The Race Keeps Accelerating

The hype is real. AI is meeting or exceeding human performance on a growing range of complex benchmarks, with other capabilities rapidly closing the gap.

AI Performance vs. Human Baseline on Selected Benchmarks

Earlier benchmarks, ImageNet, VQA, SQuAD 2.0 and SuperGLUE, cleared the human baseline years ago and no longer separate one model from the next.

Source: Stanford HAI, AI Index Report 2026 (Figure 2.1.1). Values are top reported model scores indexed to the human baseline (100%); series values read from the published figure.

Technology is moving fast, and it may never slow down again. It will also never move this slowly again, in our view. The competition is relentless, fueling a technology and capex race on an extraordinary scale.

Leadership repeatedly changes among OpenAI, Google, and Anthropic, with new model leadership emerging every 6 to 8 weeks.

AI Leadership is Constantly Changing

Epoch Capabilities Index (ECI) Score by Model Release Date, 2023–2026

Source: Epoch AI, Epoch Capabilities Index (epoch.ai/eci). ECI is scaled so Claude 3.5 Sonnet = 130 and GPT-5 = 150 by definition; point positions, the frontier line and milestone scores are digitized approximations from the published scatter chart and are illustrative, not exact benchmark values.

Humility is required when attempting to pick the winners of a technology whose full potential is still not understood. That is why we focus on what the competitors all need.

The Bottlenecks Are Physical

We remain overweight technology with a heavy bias toward the bottlenecks in compute. The AI models will keep competing, but they all need computing capacity. And regardless of who wins, they all have an electric bill to pay.

The IEA projects data center electricity demand will roughly double by 2030. Scaling the digital world requires building the physical one, and that takes power, metals, infrastructure, labor and capital.

IEA Scenarios of Electricity Demand From Data Centres

Global Data Centre Electricity Consumption (TWh): Four IEA Scenarios for 2030 and 2035

Note: 2035 figures are exploratory given the high level of uncertainty around data centre demand growth. Data source: IEA, Key Questions on Energy and AI (2026).

We also remain overweight real assets. They are the building blocks of growth and the ultimate long term bottlenecks to scaling technology. Clearing those bottlenecks requires capital investment and time.

The VanEck Real Assets ETF (RAAX) is our preferred way to invest in the physical buildout. It provides diversified exposure to the entire supply chain, from the commodities themselves to power generation and to the companies building the data centers.

RAAX Quarterly Performance & Positioning

*Returns less than one year are not annualized.

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Please call 800.826.2333 or visit vaneck.com for performance current to the most recent month ended.

All benchmark 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 the Fund. An index’s performance is not illustrative of the Fund’s performance. Benchmark indices are not securities in which investments can be made.

Gross Expense Ratio: 0.71%

Net Expense Ratio: 0.55%

Van Eck Absolute Return Advisers 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, 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, 2028.

RAAX Performance Recap

RAAX returned 0.82% for the third quarter, compared with 16.19% for the Bloomberg Commodity Index. The Fund was roughly flat in July, rose in August and fell about 3.5% in September. Because only about a quarter of the portfolio is in physical commodities, the Fund’s diversified approach trailed a pure commodity index in a quarter dominated by an energy price spike.

• Growth-Oriented Assets (~40% of the portfolio), were the main source of gains, rising approximately 15%. Oil prices surged as conflict in the Middle East disrupted supply, lifting commodities and oil and gas producers. Elsewhere, uranium and industrial companies declined.
• Capital Preservation Assets (~23% of the portfolio) gained about 5%. Gold rallied through August but gave back part of that gain in September as interest rates and the U.S. dollar rose.
• Income Producing Assets (~37% of the portfolio) were the main drag, falling about 13%. Interest rates climbed throughout the quarter, with the 10-year Treasury yield rising above 5% and the Federal Reserve raising rates in September for the first time in three years. Higher rates weighed on infrastructure, utility, pipeline and real estate companies; infrastructure companies fell the most.

RAAX Positioning

There were no significant changes to the portfolio’s target mix during the quarter. Market movements alone shifted the balance: Growth-Oriented Assets grew from about 37% to 41% of the Fund, Income Producing Assets declined from about 40% to 35%, and Capital Preservation Assets ended near 24%.

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