VanEck VectorsTM ETFs: Fund Closure FAQs
September 23, 2016
Two funds are closing:
- VanEck Vectors Gulf States Index ETF (MES)
- VanEck Vectors Indonesia Small-Cap ETF (IDXJ)
As the sponsor of VanEck Vectors Exchange Traded Funds (ETFs), VanEck has been proud to be an industry leader in offering unique, targeted exposures to numerous asset classes through ETFs which seek to meet investor needs. VanEck continuously monitors and evaluates its ETF offerings across a number of factors, including performance, liquidity, assets under management, and investor interest, among others. The decision was made to liquidate these funds based on an analysis of these factors. As of June 30, 2016, the two ETFs listed above represented approximately 0.04% of the total assets in the VanEck Vectors ETFs suite.
The last day of trading of shares of each fund listed above on NYSE Arca is expected to be Friday, October 7, 2016. In addition, after the close of business (4:00pm EST) on October 7, 2016, the funds are expected to no longer accept creation orders.
Yes. Investors can sell their shares during normal market hours until market close on October 7, 2016. Please be advised that ordinary brokerage commissions generally will apply.
The funds are expected to be de-listed after market close on October 7, 2016. Shareholders who do not sell their shares of the funds before the market close on October 7, 2016 and continue to hold their shares through the liquidation date are expected to receive cash on or about Friday, October 14, 2016 in the cash portion of their brokerage accounts equal to the amount of the net asset value (NAV) of their shares.
Shareholders who do not sell their shares prior to the liquidation date will receive a cash distribution based on the closing net asset value (NAV) of their shares. This is posted against a shareholder’s adjusted cost basis, and there likely will be a gain or loss on the transaction.
Shareholders may also receive a final distribution of dividends, capital gains, and/or income earned by the fund(s) and not previously distributed prior to liquidation.
Shareholders of each fund will receive their liquidating payment on the payment date, which is currently expected to be on or about Friday, October 14, 2016. This may occur prior to or later than Friday, October 14, 2016.
No action is required on the part of the shareholder or the financial advisor.
Shareholders should generally treat the liquidating distribution as a gain/loss issue in the same manner as they would handle the sale of a security. Shareholders will generally recognize a capital gain or loss equal to the amount received for their shares over their adjusted basis in such shares. Information regarding the final tax status of distributions will be provided to shareholders with the year-end tax reporting of the funds.
The final tax status of distributions made by the funds, including the liquidating distribution, will be provided to shareholders with the year-end tax reporting for the funds (including any portion which may be treated as a return of capital for tax purposes, reducing a shareholder’s basis in such shares).
Please consult a qualified tax advisor with any tax-related questions.
VanEck has issued a formal press release and this FAQ document to notify shareholders of the fund closures. In addition, the registration statement for each fund has been supplemented and individual mailings will be sent to all shareholders of record.
VanEck’s mission is to offer intelligently designed investment strategies that take advantage of targeted market opportunities. Founded in 1955, the firm is a pioneer in global investing with a history of placing clients’ interests first in all market environments. Today, VanEck continues this tradition by offering innovative active and passive investment portfolios in hard assets, emerging markets equity and debt, precious metals, fixed income, and other alternative asset classes. VanEck Vectors exchange-traded products are one of the largest ETP families in the world, managing more than 70 funds that span a range of sectors, asset classes, and geographies. As of August 31, 2016, VanEck managed approximately $38.1 billion in assets, including mutual funds, ETFs, and institutional accounts.
Please call 800.826.2333 or visit our website for the most recent month-end performance of VanEck Vectors ETFs. This information will be available no later than seven business days after the most recent month end.
The “net asset value” (NAV) of an ETF is determined at the close of each business day, and represents the dollar value of one share of the ETF; it is calculated by taking the total assets of an ETF subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as an ETF's intraday trading value. Investors should not expect to buy or sell shares at NAV.
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. You will incur brokerage expenses when trading Fund shares in the secondary market.
Investors may call 800.826.2333 or visit vaneck.com for a free prospectus and summary prospectus. Investing involves risk, including possible loss of principal. An investor should consider the investment objective, risks, and charges and expenses of VanEck Vectors ETFs carefully before investing. The prospectus and summary prospectus contains this and other information. Please read the prospectus and summary prospectus carefully before investing.
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