VanEck announced today that it plans to close and liquidate its
Ethereum futures ETF (EFUT).
On September 5, 2024, the Board of Trustees of VanEck ETF Trust
approved the liquidation and dissolution of the following fund (the
“Fund”):
ETF Name
Ticker
Exchange
VanEck Ethereum Strategy ETF
EFUT
CBOE
As the sponsor of VanEck ETFs, 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 the Fund
based on an analysis of these factors and other operational
considerations.
Shareholders of the Fund may sell their shares on the Fund’s
listing exchange until market close on September 16, 2024
(transaction fees from their broker-dealer may be incurred). The
Fund’s shares will no longer trade on the listing exchange after
market close on September 16, 2024, and the shares will
subsequently be de-listed. Shareholders who continue to hold shares
of the Fund on the Fund’s liquidation date, which is expected to be
on or about September 23, 2024, will receive a liquidating
distribution of cash in the cash portion of their brokerage
accounts equal to the amount of the net asset value of their
shares. Proceeds from the liquidation are currently scheduled to be
sent to shareholders on or about September 23, 2024. For tax
purposes, shareholders will generally recognize a capital gain or
loss equal to the amount received for their shares over their
adjusted basis in such shares. The Fund will stop accepting
creation orders from Authorized Participants on September 16,
2024.
In addition, shareholders who hold shares of the Fund may
receive a final distribution of net income and capital gains earned
by the Fund and not previously distributed prior to
liquidation.
The final tax status of distributions made by the Fund,
including the liquidating distribution, will be provided to
shareholders with the year-end tax reporting for the Fund
(including any portion which may be treated as a return of capital
for tax purposes, reducing a shareholder’s basis in such
shares).
About VanEck
VanEck has a history of looking beyond the financial markets to
identify trends that are likely to create impactful investment
opportunities. We were one of the first U.S. asset managers to
offer investors access to international markets. This set the tone
for the firm’s drive to identify asset classes and trends –
including gold investing in 1968, emerging markets in 1993, and
exchange traded funds in 2006 – that subsequently shaped the
investment management industry.
Today, VanEck offers active and passive strategies with
compelling exposures supported by well-designed investment
processes. As of July 31, 2024, VanEck managed approximately $111.0
billion in assets, including mutual funds, ETFs and institutional
accounts. The firm’s capabilities range from core investment
opportunities to more specialized exposures to enhance portfolio
diversification. Our actively managed strategies are fueled by
in-depth, bottom-up research and security selection from portfolio
managers with direct experience in the sectors and regions in which
they invest. Investability, liquidity, diversity, and transparency
are key to the experienced decision-making around market and index
selection underlying VanEck’s passive strategies.
Since our founding in 1955, putting our clients’ interests
first, in all market environments, has been at the heart of the
firm’s mission.
Important Disclosures
The value of Ethereum (ETH) and the Fund’s ETH Futures
holdings, could decline rapidly, including to zero. You should be
prepared to lose your entire investment. The Fund does not invest
in ETH or other digital assets directly.
The further development and acceptance of the ETH network, which
is part of a new and rapidly changing industry, is subject to a
variety of factors that are difficult to evaluate, the slowing,
stopping or reversing of the development or acceptance of the ETH
network may adversely affect the price of ETH and therefore cause
the Fund to suffer losses, regulatory changes or actions may alter
the nature of an investment in ETH or restrict the use of ETH or
the operations of the ETH network or venues on which ETH trades in
a manner that adversely affects the price of ETH and, therefore,
the Fund’s ETH Futures. ETH generally operates without central
authority (such as a bank) and is not backed by any government, ETH
is not legal tender and federal, state and/or foreign governments
may restrict the use and exchange of ETH, and regulation in the
United States is still developing.
Futures Contract Risk. The use of futures contracts
involves risks that are in addition to, and potentially greater
than, the risks of investing directly in securities and other more
traditional assets. The market for ETH Futures may be less
developed, and potentially less liquid and more volatile, than more
established futures markets. ETH Futures are subject to collateral
requirements and daily limits that may limit the Fund’s ability to
achieve its target exposure. Margin requirements for ETH Futures
traded on the Chicago Mercantile Exchange (“CME”) may be
substantially higher than margin requirements for many other types
of futures contracts. Futures contracts exhibit “futures basis,”
which refers to the difference between the current market value of
the underlying ETH (the “spot” price) and the price of the
cash-settled futures contracts.
This risk may be adversely affected by “negative roll yields”
in “contango” markets. The Fund will “roll” out of one futures
contract as the expiration date approaches and into another futures
contract on ETH with a later expiration date. The “rolling” feature
creates the potential for a significant negative effect on the
Fund’s performance that is independent of the performance of the
spot prices of the ETH. A market where futures prices are generally
greater than spot prices is referred to as a “contango” market.
Therefore, if the futures market for a given commodity is in
contango, then the value of a futures contract on that commodity
would tend to decline over time (assuming the spot price remains
unchanged), because the higher futures price would fall as it
converges to the lower spot price by expiration. Extended period of
contango may cause significant and sustained losses.
An investment in the Fund may be subject to risks which include,
but are not limited to, risks related to market and volatility,
investment (in ETH futures), ETH and ETH futures, ETH regulatory,
futures contract, derivatives, counterparty, investment capacity,
target exposure and rebalancing, borrowing and leverage, indirect
investment, credit, interest rate, liquidity, investing in other
investment companies, management, non-diversified, operational,
portfolio turnover, regulatory, repurchase agreements, tax, cash
transactions, authorized participant concentration, no guarantee of
active trading market, trading issues, fund shares trading,
premium/discount and liquidity of fund shares, U.S. government
securities, debt securities, municipal securities, money market
funds, securitized/mortgage-backed securities, sovereign bond,
ETH-related company, ETH-related concentration, and equity
securities risks, all of which could significantly and adversely
affect the value of an investment in the Fund.
Investing involves substantial risk and high volatility,
including possible loss of principal. An investor should consider
the investment objective, risks, charges and expenses of a Fund
carefully before investing. To obtain a prospectus and summary
prospectus, which contain this and other information, call
800.826.2333 or visit vaneck.com. Please read the prospectus and
summary prospectus carefully before investing.
© Van Eck Securities Corporation, Distributor, a wholly owned
subsidiary of Van Eck Associates Corporation
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Media Chris Sullivan Craft & Capital
chris@craftandcapital.com