VanEck to Transition Underlying Indexes for Several of Its Municipal Bond ETFs

SMB, ITM, MLN, SHYD and HYD, representing approximately $6.5 billion in assets, will seek to track new indexes from ICE Data Indices

VanEck today announced plans to change the underlying indexes tracked by a number of the firm’s industry-leading municipal bond ETFs, switching to new indexes from ICE Data Indices (“ICE”). The Funds include VanEck Short Muni ETF (ticker: SMB), VanEck Intermediate Muni ETF (ticker: ITM), VanEck Long Muni ETF (ticker: MLN), VanEck Short High Yield Muni ETF (ticker: SHYD) and VanEck High Yield Muni ETF (ticker: HYD).

Each Fund will seek to track a transition index, calculated by ICE, starting on or around March 1, 2022 until November 30, 2022 at which point they will transition to the final indexes. The Funds, their current underlying Bloomberg indexes and their planned ICE transition indexes are as follows¹:

After the nine-month transition period, the Funds will track the new indexes as follows:

The transition to the final indexes is expected to broaden the investment universe of each of the Funds. Following the completion of the transition phase, the Funds names and tickers will remain unchanged, and the ETFs will continue to be listed on Cboe BZX Exchange.

“We have been very impressed with ICE’s data, analytics and calculation services over the years and are very pleased to be partnering with them as we look towards significant future growth of our municipal bond ETF family,” said Michael Cohick, Director of Product with VanEck. “Given the unique nature of the municipal bond market, we are taking a transitioned approach to the index changes. This is intended to enable the portfolio managers to make the necessary adjustments to portfolio holdings in a manner that minimizes the potential impact of the turnover to shareholders. We are also happy that the change will align the pricing source used to calculate the Funds’ net asset values and the source used to calculate their index returns, essentially providing a better and more transparent experience when investors compare the ETFs’ performance against the indexes they seek to track,” Cohick added.

“We’re excited to expand our relationship with VanEck as they transition this family of municipal bond ETFs to a robust set of broader indexes that align their preferred fund NAV pricing source with the source used to calculate the indexes.” said Mark Heckert, Chief Product Officer, Fixed Income and Data Services at ICE.

VanEck has long been a leader in providing a range of municipal bond ETF solutions, launching their first muni ETF in 2007 and having since expanded the fund family to provide investors with a range of exposures at all points along the yield curve.

The firm’s most recent municipal bond ETF, the actively managed VanEck HIP Sustainable Muni ETF (SMI), launched in September and is designed to offer exposure to investment-grade municipal debt securities that focus on sustainability as well as positive social, environmental and economic outcomes or mission accomplishment.

“Investor interest in municipal bond exposures is reaching levels we have not seen for several decades, as investors pay ever closer attention to the income-generating portion of their portfolios. To help investors meet their needs and goals, we are constantly evaluating our lineup to help ensure that we are providing the best possible approaches in the most efficient formats, and we are very excited to be making these index changes and the enhancements they will bring,” added Jim Colby, Portfolio Manager with VanEck.

More information on the entire suite of VanEck municipal bond ETFs can be found here.

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 October 31, 2021, VanEck managed approximately $82.2 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

¹ Each Transition Index is an interim index that will gradually increase exposure to other securities based on their weightings in the corresponding index set forth under the “New Index” column of the table (each, a “New Index”) while proportionately reducing exposure to the corresponding index set forth under the “Current Index” column of the table (each, a “Current Index”).

The “Net Asset Value” (NAV) of a VanEck 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 ETF investors should not expect to buy or sell shares at NAV.

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An investment in the Funds may be subject to risks which include, fund of funds risk, high portfolio turnover, model and data risks, management, operational, authorized participant concentration and absence of prior active market risks, trading issues, market, fund shares trading, premium/discount and liquidity of fund shares and non-diversified risks. The funds may be subject to following risks as a result of investing in Exchange Traded Products including municipal securities, credit, high yield securities, tax, interest rate, call, state concentration and sector concentration risks. Municipal bonds may be less liquid than taxable bonds. There is no guarantee that a Funds’ income will be exempt from federal, state or local income taxes, and changes in those tax rates or in alternative minimum tax (AMT) rates or in the tax treatment of municipal bonds may make them less attractive as investments and cause them to lose value. Capital gains, if any, are subject to capital gains tax. A portion of the dividends you receive may be subject to AMT. For a more complete description of these and other risks, please refer to each Fund’s prospectus.

Investing involves substantial risk and high volatility, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. 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.

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