NEW YORK--(BUSINESS WIRE)--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
