Product Disclosure Statement. VanEck Vectors China New Economy ETF. ASX code: CNEW ARSN:

Transcription

1 VanEck Vectrs China New Ecnmy ETF ASX cde: CNEW ARSN: Prduct Disclsure Statement Issued by VanEck Investments Limited ABN AFSL N Octber 2018

2 VanEck Vectrs China New Ecnmy ETF PDS 2 Table f Cntents Sectin Title Page 1. Imprtant infrmatin t read first 3 2. Abut VanEck 4 3. Summary f the Fund 5 4. The AQUA Rules 8 5. Benefits f the Fund Hw the Fund wrks Investment bjective, strategy and perfrmance f the Fund 8. Reference Index Risks Fees and ther csts Transacting with VanEck Dividends Tax Other infrmatin yu need t knw 31 Glssary f terms 38 Crprate directry VanEck, VanEck Vectrs and Van Eck are trademarks f Van Eck Assciates Crpratin VanEck Australia Pty Ltd.

3 VanEck Vectrs China New Ecnmy ETF PDS 3 Sectin 1 Imprtant infrmatin t read first This prduct disclsure statement ( PDS ) is issued by VanEck Investments Limited ABN AFSL N as respnsible entity f the VanEck Vectrs China New Ecnmy ETF ( the Fund ). The Fund is a registered managed investment scheme having Australian Registered Scheme Number (ARSN) A class f units in the Fund ( ETF Units ) is expected t be admitted t qutatin and trading as an Exchange Traded Fund ( ETF ) n the Australian Securities Exchange. ETF Units may als be traded n the licensed financial market perated by Chi-X Australia Pty Ltd ( Chi- X ). Fr ease, all references in this PDS are nly t ASX. References in this PDS t VanEck, us, we, ur r Respnsible Entity are a reference t VanEck Investments Limited in its capacity as respnsible entity f the Fund. Capitalised terms (Like This) in this PDS are defined in the Glssary f terms. A cpy f this PDS has been ldged with the Australian Securities and Investments Cmmissin ( ASIC ), the Registrar f Financial Service Prviders, New Zealand ( RFSPNZ ) and ASX. Neither ASIC, RFSPNZ nr ASX take any respnsibility fr the cntents f this PDS. We have applied t ASX fr Units in the Fund ('ETF Units') t be admitted t trading status n ASX under the AQUA Rules as an ETF. As at the date f this PDS, E T F Units are yet t be quted. N applicatins fr ETF Units will be accepted until the expsure perid has expired and ETF Units are quted n ASX. The expsure perid expires seven days after the date f this PDS, when it was ldged with ASIC, subject t pssible extensin by ASIC fr a further seven days. Authrised Participants The ffer f ETF Units in this PDS is nly fr prfessinal r institutinal investrs wh have entered int an Authrised Participant Agreement with VanEck ( Authrised Participants r APs ). Only APs may acquire ETF Units directly frm VanEck by submitting an applicatin fr a creatin (see sectin 11). ASX Investrs All investrs may purchase ETF Units n ASX, like purchasing shares in a listed cmpany and may use this PDS fr infrmatin purpses nly. ASX Investrs may buy and sell ETF Units n ASX thrugh their nline brker, stckbrker r financial adviser ('Brker') and are nt required t submit an applicatin under this PDS. Classes f units The ETF Units referred t in this PDS are an ETF class f units in the Fund. As such it is nly the ETF class f the Fund that is quted n ASX. As at the date f this PDS, the Fund nly has a single class f units, being the ETF class. Under the Fund s cnstitutin ('Cnstitutin'), VanEck is permitted t establish different classes f units. Up t date infrmatin All infrmatin in this PDS is current as at the date f this PDS. Unless therwise stated, VanEck surces its data frm public r licensed market data. Infrmatin and the terms in this PDS are subject t change frm time t time. We may prvide ntices f any updates r changes t infrmatin that are nt materially adverse t investrs by publishing a ntice at n the Fund s page. If we issue a supplementary r replacement PDS, in additin t updating the dcuments n ur website we will make an annuncement n ASX. A paper cpy f this PDS and any updated infrmatin will be prvided free f charge n request by cntacting us at General advice warning This PDS cntains general infrmatin nly and is nt financial advice. It is nt a recmmendatin by us r any ther persn t invest in the Fund. The infrmatin des nt take int accunt the individual investment bjectives, financial situatin r needs f any persn. Befre making an investment decisin, yu shuld cnsider (in cnsultatin with a financial adviser) if the decisin is apprpriate fr yur persnal financial situatin, needs and bjectives. An investment in the Fund is subject t varius risks (see sectin 9), including pssible delays in repayment and lss f incme and capital invested. Nne f VanEck Investments Limited, VanEck Australia Pty Ltd, Van Eck Assciates Crpratin r their related entities, directrs r fficers, gives any guarantee r assurance as t the perfrmance f the Fund, the payment f incme r the repayment f capital invested. Freign Investrs Freign prfessinal and institutinal investrs may act as Authrised Participants subject t relevant laws. Other Freign Investrs may trade ETF Units n ASX via their stckbrker. ETF Units are nt intended t be sld t United States ( US ) Persns as defined under Regulatin S f the US federal securities laws.

4 VanEck Vectrs China New Ecnmy ETF PDS 4 Sectin 2 Abut VanEck 2.1 VanEck Investments Limited The Respnsible Entity VanEck Investments Limited is the Respnsible Entity f the Fund and the issuer f this PDS and the ETF Units and is respnsible fr the management, peratin and administratin f the Fund. Fr mre infrmatin abut VanEck s pwers and duties as Respnsible Entity see sectin VanEck Investments Limited is a whlly wned Australian subsidiary f New Yrk based asset manager Van Eck Assciates Crpratin. RQFII VanEck has been granted a Renminbi Qualified Institutinal Investr RQFII license by the China Securities and Regulatry Cmmissin ( CSRC ) enabling us t ffer investrs access t the ptential pprtunities in the China equities market via a prtfli f China A-shares. 2.2 VanEck Vectrs ETFs VanEck s exchange traded prducts ( ETPs ) have been ffered in the US since 2006 and span many asset classes including equities and fixed incme in bth develped and emerging markets. 2.3 Funded in 1955 Van Eck Assciates Crpratin is a privately held glbal asset management firm funded in New Yrk in The firm was amng the first US mney managers helping investrs achieve greater diversificatin thrugh glbal investing. Tday we are recgnised fr being a pineer in glbal markets and fr drawing n ur experience t ffer innvative slutins. Our missin is t ffer investrs intelligently designed investment strategies that take advantage f targeted market pprtunities. With ffices in key financial centres and regins including New Yrk, Sydney, Shanghai, Frankfurt, Dublin, Amsterdam, Madrid and Zurich, the firm ffers investrs brad investment reach with deep experience. As at 30 September 2018, VanEck grup managed ver $63 billin in investr assets including its VanEck Vectrs ETP business. Fr mre infrmatin n VanEck, visit As at 30 September 2018 the VanEck grup s family f ETPs ttalled ver $52 billin in assets under management, making it ne f the largest ETP families wrldwide.

5 VanEck Vectrs China New Ecnmy ETF PDS 5 Sectin 3 Summary f the Fund VanEck Vectrs China New Ecnmy ETF Fr mre infrmatin Respnsible Entity VanEck Investments Limited ABN AFSL N Sectin 1 Type f investment: Exchange Traded Fund (ETF) Investment purpse Investment bjective An ETF is an pen-ended fund that aims t track the perfrmance, befre fees and ther csts, f a financial market index by investing in a prtfli f securities that cnstitute the index. Units in an ETF are traded n ASX. As such, an ETF gives investrs easy access and cst effective expsure t the prtfli f securities held by the ETF via a single trade n ASX. The Fund seeks t prvide investrs with access t a prtfli f the mst fundamentally sund cmpanies with the best grwth prspects in the cnsumer discretinary, cnsumer staples, healthcare, and technlgy sectrs that are dmiciled and listed in China. The Fund aims t prvide investment returns befre fees and ther csts which track the perfrmance f its Reference Index in Australian dllars. Sectins 4, 5 and 6 Sectins 7, 8 Sectins 7, 8 Reference Index CSI MarketGrader China New Ecnmy Index Sectins 7, 8 Investment strategy Benefits The Fund emplys a passive management strategy f investing directly in the securities that cmprise the Reference Index. The Fund prvides investrs with: Sectins 7, 8 Sectin 5 cst effective and easy access t a diversified prtfli f China A-shares via a single trade n ASX; transparency f hldings, pricing and perfrmance; and flexibility f intraday ASX trading capability. Risks Cmpared t unlisted actively managed funds, investrs benefit frm: trading via live prices n ASX; ptentially lwer csts and lwer tax liabilities; liquidity; transparency and intraday trading. An investment in the Fund is subject t varius risks which may have the effect f reducing the value f the Fund, resulting in a lss f yur capital invested and a lack f incme frm the Fund. In particular the Fund will be expsed t heightened risks cmpared t investing in the Australian market, which are assciated with an investment in China which is an emerging market. These risks include currency risks frm freign exchange fluctuatins, ASX trading time differences, freign laws and regulatins including taxatin, ptential difficulties in enfrcing cntractual bligatins, changes in gvernment plicy, exprpriatin, ecnmic cnditins including internatinal trade barriers, restrictins n freign wnership, securities trading restrictins, restrictins n repatriatin and restrictins n currency cnversin. Yu shuld carefully cnsider the risks in sectin 9 befre deciding t invest. Sectin 9

6 VanEck Vectrs China New Ecnmy ETF PDS 6 Investing in the Fund All investrs Unit Price r NAV The Unit Price r NAV f the Fund is calculated as the Fund Net Asset Value divided by the number f ETF Units n issue. It is calculated daily after the clse f trading based n the clsing prices f the securities n the applicable Chinese r Hng Kng stck exchange. It is then cnverted t Australian dllars and will be published at prir t the pen f the next ASX Trading Day. Sectin 11 Authrised Participants transacting under this PDS Transacting with VanEck by APs Authrised Participants must enter int an AP Agreement with VanEck and submit written applicatins fr creatins r redemptins f ETF Units. Sectin 11 Price paid by APs Authrised Participants transact with VanEck fr creatins r redemptins f ETF Units at the Fund s NAV calculated fllwing the clse f trading fr that day, plus r minus fees and ther csts. Cutff time fr applicatins Creatins Redemptins APs minimum transactin size 4pm n each ASX Trading Day. ETF Units can nly be created in multiples f Creatin Units fr the Fund, unless we agree therwise. Payment fr a creatin must generally be made by the Authrised Participant in the frm f a specified parcel f securities (Standard Basket) plus r minus a balancing cash amunt (Standard Basket Transactin). If we agree, payment may als be made by: (i) cash, r (ii) a cmbinatin f securities and cash (Nn-Standard Transactin). ETF Units can nly be redeemed in multiples f Redemptin Units, unless we agree therwise. Payment f redemptin prceeds will primarily be in the frm f a Standard Basket Transactin. If we agree, the redemptin prceeds may als be paid by a Nn-Standard Transactin. Unless we agree therwise in advance, the minimum number f ETF Units fr a creatin (ne Creatin Unit) and a redemptin (ne Redemptin Unit) are as fllws: Fund N. f ETF Units per Creatin Unit CNEW 400, ,000 Investing in the Fund via ASX ASX Investrs Buying/selling ETF Units n ASX N. f ETF Units per Redemptin Unit ASX Investrs may buy and sell ETF Units in the Fund n ASX thrugh their Brker just like trading shares in listed cmpanies. A Market Maker is engaged t facilitate liquidity fr trading in ETF Units n ASX. There is n minimum trade size n ASX. Yu shuld check with yur Brker. Sectins 4, 5 ASX prices Cling-ff ASX Investrs trade ETF Units at trading prices quted n ASX thrughut each ASX Trading Day. The presence f a Market Maker means trading prices shuld remain clse t the NAV, adjusted fr changes in value f the underlying securities during the ASX Trading Day. There are n cling-ff rights applicable t the ffers in this PDS r t trading f ETF Units n ASX.

7 VanEck Vectrs China New Ecnmy ETF PDS 7 Fees and ther csts All investrs Sectin 10 Management csts Transactinal and peratinal csts Fund CNEW Management csts 0.95% p.a. Management csts are inclusive f GST and net f any reduced input tax credits and may be negtiated by whlesale clients. Additinal csts relating t trading in the prtflis and assciated peratinal activities will als apply see sectin Authrised Participants nly als pay Sectin 10 Transactin fees fr creatins and redemptins Additinal csts fr cash transactins Fund CNEW $6600 Cntributin fees / withdrawal fees (excl GST) per transactin Cntributin and withdrawal fees may be negtiated and may change withut ntice. The estimated additinal transactinal and peratinal csts incurred by the Fund in relatin t cash transactins are charged t Authrised Participants as a buy/sell spread n creatins and redemptins r recvered frm APs by way f a true up fllwing settlement. Dividends Frequency Fund Frequency Sectin 12 Dividend Reinvestment Plan CNEW Annually A Dividend Reinvestment Plan (DRP) is available subject t the DRP Rules. Dividends will be paid as cash t yur nminated bank accunt unless yu cntact the Registrar and elect t have dividends reinvested. Yur dividends will then appear as additinal ETF Units in yur accunt. Additinal infrmatin Website Statements The fllwing infrmatin is available at Fund Net Asset Value; Unit Price; prtfli hldings; number f ETF Units utstanding; the current PDS, any supplementary PDS and ntice f any changes that are nt materially adverse t investrs; DRP Rules; Unit Pricing Plicy; infrmatin abut any dividends; a link t any annuncements ldged with the ASX Market Annuncements Platfrm (including cntinuus disclsure ntices); any ther disclsure that is made available r prvided t Unithlders; and annual reprts and half-year reprts (including financial statements). The fllwing statements will be prvided t investrs: hlding statement fr any transactins made during the mnth; dividend statement; annual tax statement after 30 June each year; and peridic statement shwing yur transactins and investments in the Fund sent annually and fllwing yur exit frm the Fund.

8 VanEck Vectrs China New Ecnmy ETF PDS 8 Sectin 4 The AQUA Rules 4.1 The AQUA Rules ETF Units in the Fund is admitted t trading n ASX under the AQUA Rules. The AQUA Rules are a subset f the ASX Operating Rules that prvide a tailred framewrk fr the qutatin f managed funds, ETFs and ther prducts n ASX, prviding issuers with access t ASX back ffice clearing and settlement services. The nly prducts that can be admitted t trading under the AQUA Rules are thse where the prduct has a capital value r dividends linked t liquid underlying instruments with rbust and transparent pricing mechanisms. Under the AQUA Rules, ASX may require the issuer t facilitate liquidity in the ETF Units by way f the appintment f a Market Maker whse rle generally is t act as a seller and buyer t match demand frm purchasers and sellers f ETF Units n ASX in certain circumstances and subject t certain cnditins. As a result, the Fund is expected t remain liquid. Fr mre infrmatin see sectin VanEck has n influence r cntrl ver the value f the underlying assets The key difference between prducts admitted t trading under the ASX Listing Rules and thse admitted t trading under the AQUA Rules is the level f influence that the issuer has ver the underlying instrument. Under the ASX Listing Rules, a listed equity issuer typically lists securities which reflect the value f a business which they perate and cntrl. By cntrast, securities admitted t trading under the AQUA Rules typically reflect the value f sme ther asset which the issuer des nt cntrl, such as a parcel f listed securities f ther cmpanies, indices, bnds, cmmdities, r currency. The value f the Fund reflects the value f the underlying prtfli f securities in the Fund and nt the value f VanEck s business. The fllwing table highlights the key differences between the ASX Listing Rules and the AQUA Rules.

9 VanEck Vectrs China New Ecnmy ETF PDS Key differences between the ASX Listing Rules and the AQUA Rules ASX Listing Rules Cntinuus disclsure Issuers are subject t the cntinuus disclsure requirements under Listing Rule 3.1 and sectin 674 f the Crpratins Act. Peridic disclsure Issuers are required t disclse their halfyearly and annual financial infrmatin r annual reprts t ASX under Chapter 4 f the Listing Rules Crprate cntrl Requirements in the Crpratins Act and the Listing Rules in relatin t matters such as takever bids, share buy-backs, change f capital, new issues, restricted securities, disclsure f directrs interests and substantial sharehldings, apply t cmpanies and listed schemes. Related party transactins Chapter 10 f the Listing Rules, which relates t transactins between an entity and persns in a psitin t influence the entity, specifies cntrls ver related party transactins. Auditr rtatin bligatins There are specific requirements in relatin t auditr rtatin under Part 2M.4 Divisin 5 f the Crpratins Act. Disclsure dcumentatin Entities admitted under the Listing Rules are subject t the requirements f the Crpratins Act in relatin t the issue f a prspectus r PDS. Surce: ASX Rules Framewrk AQUA Rules AQUA prduct issuers are nt subject t the cntinuus disclsure requirements under Listing Rule 3.1 and sectin 674 f the Crpratins Act (because the underlying instruments are) but must disclse via the ASX Market Annuncements Platfrm: ETF Units utstanding n a mnthly basis; dividends and ther disbursements; infrmatin the nn-disclsure f which may lead t the establishment f a false market in its prducts r wuld materially affect the price f its prducts; and any ther infrmatin that is required t be disclsed t ASIC under sectin 675 f the Crpratins Act must be disclsed t ASX at the same time it is disclsed t ASIC. AQUA prduct issuers are currently nt required t disclse their half-yearly and annual financial infrmatin r annual reprts t ASX, hwever, as the Respnsible Entity f the Fund which are registered managed investment scheme prducts, we are still required t ldge with ASIC and disclse t ASX at the same time, financial reprts required under Chapter 2M f the Crpratins Act. These requirements d nt apply t AQUA prduct issuers. Sectin 601FM f the Crpratins Act cntinues t apply t the remval r change f the respnsible entity. An extrardinary reslutin wuld be required t change the Respnsible Entity. An extrardinary reslutin is a reslutin supprted by a majrity f the ttal vtes that may be case by the Fund s members entitled t vte n the reslutin. Chapter 10 f the Listing Rules des nt apply t AQUA prducts. Prducts quted under the AQUA Rules which are registered managed investment schemes remain subject t the related party requirements in Part 5C.7 and Chapter 2E f the Crpratins Act. These requirements d nt apply t AQUA prduct issuers. Respnsible entities f registered managed investment schemes will cntinue t be required t undertake an independent audit f their cmpliance with each scheme's cmpliance plan in accrdance with sectin 601HG f the Crpratins Act and the auditr must nt be the auditr f the scheme's financial statements (but may be frm the same firm). Prducts admitted t trading under the AQUA Rules will als be subject t these requirements f the Crpratins Act.

10 VanEck Vectrs China New Ecnmy ETF PDS 10 Sectin 5 Benefits f the Fund 5.1 China A-share strategy via ASX In a single trade n ASX, the Fund gives investrs a diversified prtfli f 120 f the mst fundamentally sund cmpanies with the best grwth prspects in the cnsumer discretinary, cnsumer staples, healthcare, and technlgy sectrs that are dmiciled and listed n the Shanghai and Shenzhen stck exchanges in China. Fr mre infrmatin n the Fund s Reference Index methdlgy see sectin Exchange Traded Fund The Fund is an ETF. ETFs prvide investrs with the best attributes f bth managed funds and listed shares. When yu invest in the Fund, yu gain access t a prtfli f investments, cnstructed using prfessinal skills and knwledge that yu may nt have access t if yu invest n yur wn. ETFs can be easily traded n ASX like listed shares, with live pricing thrughut the ASX Trading Day. The difference between a single trade in ETF Units and cmpany shares is that when yu buy ETF Units yu acquire expsure t the perfrmance f an entire prtfli f securities nt just a single cmpany, saving yu mney and time. ETFs als prvide ptential advantages t investrs including lw csts and full daily transparency f the underlying prtfli hldings. 5.3 Access t China A-shares via ASX Investing directly in China A-shares is difficult. The Fund prvides simple access via an Australian ETF which simplifies yur administratin and reprting and eliminates freign paperwrk. Investrs als benefit frm the ther advantages f trading n ASX, including the ability t transact during Australian market hurs and settle payments in Australian dllars. 5.4 Lwer csts Since ETFs track an index, they are typically able t achieve lwer perating csts. As a result they charge management csts which are generally lwer than thse f equivalent unlisted actively managed funds. As is the case when trading shares, Brker fees may als apply when buying r selling ETF Units n ASX. See sectin 10 fr mre infrmatin. 5.5 Diversificatin with a single trade The Fund prvides yu with a simple way t access a diversified prtfli f 120 listed China A-shares via a single trade n ASX. 5.6 Liquidity Yu can buy and sell ETF Units n ASX. Liquidity in the Fund is facilitated by a Market Maker. The Market Maker s rle is t match buy and sell rders fr ETF Units frm ASX Investrs. 5.7 Flexibility f trading n exchange As the ETF Units are quted n ASX, yu have the flexibility t trade the ETF Units in the Fund thrughut the day, like trading shares. Yu can even buy and sell n the same day (intraday trading). 5.8 Transparency f hldings The Fund prvide investrs with transparency in respect f prtfli hldings which are published daily at Tax advantages In cntrast t an unlisted actively managed fund, the turnver f the underlying prtfli in the Fund, which is an index-tracking fund, is generally lw, reducing the level f capital gains and assciated capital gains tax payable by yu. Withhlding tax n any dividends frm underlying securities arises at the Fund level and nt the investr level. This means yu d nt have t cmplete freign frms in rder t get the benefit f reduced withhlding tax rates. VanEck arranges fr the cmpletin f all necessary paperwrk fr the Fund. Capital gains may be paid t Authrised Participants when they redeem, which reduces the tax burden n the remaining Unithlders. Unlisted managed funds typically d nt d this. Fr mre infrmatin n dividends and tax, see sectins 12 and 13.

11 VanEck Vectrs China New Ecnmy ETF PDS 11 Sectin 6 Hw the Fund wrks 6.1 Registered managed investment scheme The Fund is registered with ASIC and regulated as a registered managed investment scheme a class f units in which is admitted t trading n ASX (ETF Units). The Fund perates like mst ther managed investment schemes: the Fund is cnstituted as a unit trust ; when yu invest yu acquire units (like shares) in the trust which give yu a beneficial interest in the assets f the Fund; yur mney is pled tgether in the Fund with ther investrs mney t buy investments which are managed by the Respnsible Entity under fiduciary bligatins t act in the best interests f all investrs. 6.2 Primary and secndary markets Large numbers f ETF Units are first issued by VanEck in the primary market t institutinal investrs (Authrised Participants) in exchange fr a specified basket f Chinese securities, r cash with which we buy the securities, determined in accrdance with the Fund s investment strategy. The securities becme the assets f the Fund designed t meet the Fund s investment bjective. Once ETF Units have been received by the AP (in exchange fr securities and/r cash), the ETF Units are made available fr trading n the secndary market, i.e. n ASX. ASX Investrs can then buy and sell the ETF Units with the Authrised Participant, the Market Maker, r ther ASX Investrs in exchange fr cash thrugh CHESS. The issuing f ETF Units is knwn as a creatin. When ETF Units are redeemed at the request f the Authrised Participant (in exchange fr securities, r cash r a cmbinatin f bth) this is knwn as a redemptin. Authrised Participants can apply t create r redeem ETF Units based n the NAV at the end f the relevant Business Day. ASX Investrs can generally trade thrughut each ASX Trading Day at trading prices quted n ASX. 6.3 Rights f a Unithlder Whether yu invest in the Fund as an Authrised Participant r as an ASX Investr yu hld ETF Units and have the rights f a Unithlder, as set ut in the Cnstitutin f the Fund. Fr mre infrmatin n yur rights as a Unithlder see sectin Rles and respnsibilities The key rles invlved in the peratin f the Fund are set ut in the table belw. VanEck may change the parties perfrming the rles named belw at any time in its discretin with the exceptin f the Respnsible Entity which can nly be changed in accrdance with the Crpratins Act. Rle Respnsible Entity Investment manager Custdian Fund Administratr Index Prvider Registrar Authrised Participant Market Maker Prxy vting agent Respnsibility Issues the ETF Units and this PDS and is respnsible fr perating the Fund. Manages the investment prtfli f the Fund in line with the Fund s investment strategy. At the date f this PDS, the investment manager is VanEck. Hlds the assets f the Fund fr safe-keeping n behalf f the Respnsible Entity and Unithlders. Assets are segregated frm the Custdian s assets r any ther funds assets. Prcesses creatins, redemptins and ther requests frm Unithlders and maintains the bks and recrds f the Fund, including: fund accunting; calculating Unit Prices and taxatin. Develps and maintains the Reference Index that the Fund aims t track. Maintains the register f Unithlders including: names quantity f securities held, tax file numbers and DRP details; and issues crrespndence t Unithlders n behalf f the Respnsible Entity. Transacts directly with the Respnsible Entity t create (r redeem) ETF Units (primary market) t match demand frm ASX Investrs. In sme cases als act as a Market Maker. Subject t certain cnditins, prvides liquidity and vlume in the Fund n ASX by acting as a seller and a buyer f ETF Units t/frm ASX Investrs (secndary market) thrughut the ASX Trading Day. In sme cases acts as an Authrised Participant in the primary market and then qutes the ETF Units n ASX fr sale t ASX Investrs. Specialist prvider engaged by the Respnsible Entity t cnduct in-depth cmpany research including ESG cnsideratins and vte based n specified guidelines in the best interests f preserving sharehlder value, as well as reprting and recrdkeeping.

12 VanEck Vectrs China New Ecnmy ETF PDS 12 Sectin 7 Investment bjective, strategy and perfrmance f the Fund 7.1 Investment bjective f the Fund The Fund aims t prvide investment returns befre fees and ther csts which track the perfrmance f its Reference Index in Australian dllars. The Fund des nt aim t perfectly replicate its Reference Index n a ne-t-ne basis fr a number f reasns, including: differences in the timing f dividends and crprate actins between the Reference Index and the Fund; the Fund may nt be able t achieve the same trading price fr securities as that determined fr the Reference Index; there are fees and ther csts applicable t perating the Fund which d nt apply t the Reference Index (see sectin 10); Chinese withhlding tax rates applied t the Reference Index may differ t thse applicable t the Fund; we may allw individual security weightings t vary marginally frm the Reference Index and may invest in securities that are nt in the Reference Index. See sectin 7.2; and the Fund may hld a small amunt f cash. 7.2 Investment strategy f the Fund Passive physical replicatin The Fund emplys a passive management strategy f physically replicating the Reference Index by investing directly in the securities that cmprise the Reference Index in prprtin t their relative weightings in the Reference Index. The Fund may als hld ther securities determined by us as necessary t achieve the Fund s investment bjective and as permitted under the AQUA Rules. Every time a security is either added t r remved frm the Fund s Reference Index, it may be necessary t make changes t the respective Fund s prtfli t track the Reference Index. See sectin 8 fr mre infrmatin. VanEck will invest in the underlying A-shares using its RQFII quta n the Shanghai and Shenzhen stck exchanges and via the Stck Cnnect prgram n the Stck Exchange f Hng Kng. See sectin t fr mre infrmatin Futures Futures traded n a licensed exchange may be used by the Fund in extrardinary circumstances t gain market expsure withut investing directly in underlying securities in the Reference Index, r fr the purpse f shrt term management f certain cash flws with the intentin f reducing tracking errr risk. This allws VanEck t maintain the Fund s liquidity withut being under-invested. Imprtantly, derivatives are nt used in the Fund fr speculatin r t intentinally leverage the Fund s perfrmance. Fr mre infrmatin see sectins and Perfrmance infrmatin Up t date perfrmance infrmatin fr the Fund and histrical perfrmance relative t the Reference Index is published at The perfrmance f the Fund will differ frm that f its Reference Index. Fr mre infrmatin see sectins 7.1 and Neither the return f capital invested nr the perfrmance f the Fund is guaranteed. Past perfrmance is nt an indicatr f current r future returns which may be higher r lwer. 7.4 Brrwing arrangements VanEck may maintain brrwing arrangements n behalf f the Fund with the intentin f reducing tracking errr risk. Fr mre infrmatin see sectins 9.2.9, and The main purpses fr brrwing by the Fund are fr the shrt term management f certain cash flws assciated with: Dividend equitisatin the Reference Index assumes that dividends are reinvested n the ex-date. In reality dividends are received by the Fund sme time later; and Crprate actins the Reference Index assumes that crprate actins are implemented n the ex-date, but in reality the cash r shares resulting frm the crprate actin are received by the Fund sme time later.

13 VanEck Vectrs China New Ecnmy ETF PDS Changes t the Fund s investment bjective and strategy We may frm time t time vary the Fund s investment bjective and strategy including replacing its Reference Index. The Index Prvider may als vary r replace the Reference Index. We will ntify Unithlders f any such changes. 7.6 Envirnmental, scial and ethical cnsideratins The Fund aims t track the perfrmance f the Reference Index. The Index Prvider des nt take int accunt labur standards r envirnmental, scial r ethical cnsideratins when selecting securities fr the Reference Index. Accrdingly the Fund des nt take such matters int cnsideratin when acquiring r realising investments, hwever, VanEck des cnsider ESG matters when exercising any prxy vting rights. 7.7 Prxy vting We intend t vte all prxies in accrdance with the best interests f Unithlders withut influence by real r apparent cnflicts f interest. T assist in ur respnsibility fr vting prxies and the verall vting prcess, we have engaged a third party prxy vting specialist. The services prvided by the specialist include: cnducting in-depth cmpany research including ESG cnsideratins; prviding vting recmmendatins and vte executin based n specified guidelines in the best interests f preserving sharehlder value; as well as reprting and recrdkeeping. 7.8 Securities lending The Fund will nt engage in securities lending.

14 VanEck Vectrs China New Ecnmy ETF PDS 14 Sectin 8 Reference Index 8.1 Reference Index summary Reference Index r Index Index Prvider Overview/bjective Summary f Index Rules Mre infrmatin CSI MarketGrader China New Ecnmy Index (AUD) China Securities Index C ( CSI ) in partnership with MarketGrader.cm Crpratin ( MarketGrader ) Neither MarketGrader nr CSI are related bdies crprate f VanEck. The CSI MarketGrader China New Ecnmy index cnsists f the 120 mst fundamentally sund cmpanies in the cnsumer discretinary, cnsumer staples, health care and technlgy sectrs, dmiciled in China and traded publicly in the Shanghai and Shenzhen stck exchanges (A-Shares). The Index seeks t identify the cmpanies in China with the best grwth at a reasnable price (GARP) attributes as the best drivers f lng-term capital appreciatin. The index cnstituents are selected n the basis f the strength f their fundamentals acrss fur factr categries: grwth, value, prfitability and cash flw. The index is equally weighted at each f its semi-annual rebalances, giving each cmpany an equal pprtunity t cntribute t the perfrmance f the verall index. Underlying universe All A-shares listed in the Shanghai and Shenzhen Stck Exchanges that are cvered and rated by MarketGrader, that are nt special treatment stcks ( ST stcks ), and are classified as cnsumer discretinary, cnsumer staples, health care and technlgy. Selectin criteria All Index cmpnents are selected based n their verall MarketGrader grade. Built n a scale between 0 and 100, the MarketGrader grade is based n 24 fundamental indicatrs, which are brken dwn int fur analytical categries: grwth, value, prfitability and cash flw. All f MarketGrader s indicatrs and verall grades are calculated daily fr all cmpanies under cverage. Weighting The Index is equally weighted. Market Capitalisatin requirements All Index cnstituents must have a minimum ttal market cap f RMB 1.38 billin. At least 20% f all Index cnstituents (24 cmpanies, 6 frm each sectr) must be designated as large caps accrding t MarketGrader s annual size classificatin f all Shanghai and Shenzhen-listed equities under cverage. Liquidity requirements A minimum 3-mnth daily traded value f RMB 13.8 millin and at least 12-mnth aggregate trading vlume f RMB 345 millin as f the selectin date. Rebalance frequency The Index is recnstituted and rebalanced twice a year n the next trading day after the clse f trading n the secnd Friday in June and December. See

15 VanEck Vectrs China New Ecnmy ETF PDS CSI MarketGrader Indices The Reference Index is part f the CSI MarketGrader family f China A-shares smart beta indices develped, published and licensed in partnership between MarketGrader, a US independent equity research and indexing firm, and China Securities Index C. Ltd (CSI), the leading index prvider in China. VanEck has entered int a licensing agreement t use the Index. The CSI MarketGrader Indices use MarketGrader s prprietary grwth at a reasnable price (GARP) stck selectin methdlgy t identify financially strng cmpanies in the A-shares universe that represent a new breed f equities in China s rapidly transfrming ecnmy. This fundamentalsdriven stck selectin apprach reflects an alternative t traditinal selectin and weighting methdlgies simply based n market capitalisatin and ther smart beta appraches fcused n islating specific factrs. 8.3 Abut China Securities Index C. Ltd (CSI) CSI acts as the calculatin agent and issuer f the Reference Index. CSI is the largest index prvider in China and a jint venture between the Shanghai Stck Exchange and the Shenzhen Stck Exchange. CSI is a prfessinal business entity specialising in the creatin and management f indices cvering A-shares, bnds, cmmdity futures, internatinal securities and ther asset classes and index related services. 8.4 Abut MarketGrader MarketGrader is respnsible fr the selectin f all the Index cnstituents at each semi-annual rebalance based n their verall fundamental scre in MarketGrader s glbal equity research platfrm, which currently cvers 2,800 A-shares listed in the Shanghai and Shenzhen Stck Exchanges. Frmed in 1999, MarketGrader was funded n the belief that fundamental analysis and transparency are central t better investment decisin-making. The cmpany s grwth at a reasnable price (GARP) methdlgy is designed t identify cnsistent creatrs f ecnmic value, as it believes such stcks are the best lng-term generatrs f sharehlder value. 8.5 Index disclaimers The Fund is nt spnsred, endrsed, distributed, sld r prmted by CSI r MarketGrader and neither CSI nr MarketGrader makes any representatin regarding the advisability f investing in the Fund. CSI and MarketGrader's nly relatinship t VanEck is the licensing f the CSI MarketGrader China New Ecnmy Index which is determined, cmpsed and calculated by MarketGrader and CSI withut regard t VanEck r the Fund. MarketGrader and CSI have n bligatin t take the needs f VanEck r investrs in the Fund int cnsideratin in determining, cmpsing r calculating the CSI MarketGrader China New Ecnmy Index. The inclusin f a particular security in the Index des nt reflect in any way an pinin f MarketGrader r its affiliates with respect t the investment merits f such security. NEITHER MARKETGRADER OR CSI SHALL BE A PARTY TO THE TRANSACTION CONTEMPLATED BY THE OFFER IN THIS PDS, AND IS NOT PROVIDING ANY ADVICE, RECOMMENDATION, REPRESENTATION OR WARRANTY REGARDING THE ADVISABILITY OF INVESTING IN THE FUND OR THE ABILITY OF THE FUND S INVESTMENT PERFORMANCE TO TRACK THE REFERENCE INDEX. BOTH MARKETGRADER AND CSI HEREBY EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS, STATUTORY OR IMPLIED, REGARDING THIS OFFER AND ANY USE OF THE REFERENCE INDEX, INCLUDING BUT NOT LIMITED TO ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, AND NON- INFRINGEMENT AND ALL WARRANTIES ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING AND USAGE OF TRADE OR THEIR EQUIVALENTS UNDER THE LAWS OF ANY JURISDICTION. UNDER NO CIRCUMSTANCES AND UNDER NO THEORY OF LAW, TORT, CONTRACT, STRICT LIABILITY OR OTHERWISE, SHALL MARKETGRADER OR CSI OR ANY OF THEIR AFFILIATES BE LIABLE TO ANY PERSON FOR ANY DAMAGES, REGARDLESS OF WHETHER THEY ARE DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER, INCLUDING DAMAGES FOR TRADING LOSSES OR LOST PROFITS, OR FOR ANY CLAIM OR DEMAND BY ANY THIRD PARTY, EVEN IF MARKETGRADER OR CSI KNEW OR HAD REASON TO KNOW OF THE POSSIBILITY OF SUCH DAMAGES, CLAIM OR DEMAND. "MARKETGRADER" and CSI MARKETGRADER CHINA NEW ECONOMY INDEX are trademarks f MarketGrader.

16 VanEck Vectrs China New Ecnmy ETF PDS 16 Sectin 9 Risks 9.1 What is risk? All investments have sme level f risk. Different investment strategies have different levels f risk depending n the underlying mix f assets that make up the strategy. Usually assets with the ptential fr the highest lng-term returns carry the highest levels f shrt-term risk. These investments are generally described as mre vlatile and have a higher risk f lsing mney, but they can als give yu a better chance f achieving yur lng-term bjectives. Investments that prduce mre stable returns are cnsidered less vlatile and therefre less risky, but they may nt prvide sufficient lng-term returns fr yu t achieve yur lng-term gals. The level f risk yu are willing t accept will depend n a range f factrs including: yur investment gals; yur age; yur investment time frame; where ther parts f yur wealth are invested; and yur verall risk tlerance. It is imprtant fr yu t carefully cnsider the risks f investing in the Fund and t understand that: the value f yur investment will vary; investment returns will vary and future returns may differ frm past returns; returns are nt guaranteed and yu may lse mney; and laws affecting managed investment schemes may change, impacting yur investment. Yu shuld cnsult a financial adviser t help yu understand investment risk and design an investment strategy that is right fr yur individual risk tlerance, financial situatin, needs and bjectives. 9.2 Risks assciated with the Fund The Fund invests nly in China A-shares listed n the Shanghai and Shenzhen stck exchanges in China under VanEck s RQFII license, r listed n the Stck Exchange f Hng Kng via Stck Cnnect. China is an emerging market. Grwth investments such as shares generally have relatively higher market risk than bnds and cash. Internatinal shares generally have higher risks than Australian shares and investing in emerging markets such as China, has specific risks which are in additin t the typical risks assciated with investing in Australia and ther develped markets. Investrs shuld be aware that markets can fluctuate affecting the returns n an investment prtfli frm day-t-day. Investrs in the Fund must be willing t accept a high degree f vlatility in the perfrmance f the Fund. This vlatility may cause the value f an investment in the Fund t decrease Emerging markets risks Like all financial markets, emerging markets are subject t market risks such as: investr sentiment, ecnmic impacts, regulatry cnditins, industry r sectr-specific events and plitical and catastrphic events. In any asset class, the returns f individual securities are impacted by a cmbinatin f the market risks and risks specific t each security. The Fund is cncentrated in China which is an emerging market cuntry. Investments in emerging markets face a greater risk f lss than investments in develped markets. This is due t, amng ther things, greater market vlatility, lwer trading vlume, plitical and ecnmic instability, high levels f inflatin, deflatin r currency devaluatin, greater risk f market shut dwn, evlving legal and regulatry framewrks and exchange rules, ptential difficulty in enfrcing cntractual bligatins and mre gvernmental limitatins n freign investment plicy than thse typically fund in a develped market. In additin, the financial stability f listed cmpanies in emerging market cuntries may be mre precarius than in develped markets. Trading, settlement and custdy practices fr transactins in emerging markets may differ frm develped markets including delays and delivery f securities prir t receipt f payment. The limited liquidity f emerging market cuntry securities may als affect the Fund s ability t

17 VanEck Vectrs China New Ecnmy ETF PDS 17 accurately value its prtfli securities r t acquire r dispse f securities at the price and time it wishes t d s r in rder t meet redemptin requests. The Fund may in particular be affected by plitical and ecnmic develpments in r affecting China including changes in gvernment plicy, taxatin and scial, ethnic and religius instability. China s ecnmy is heavily dependent upn internatinal trade and, accrdingly, has been and may cntinue t be adversely affected by trade barriers, freign exchange cntrls, and ther prtectinist measures impsed r negtiated by the cuntries with which they trade. Exprpriatin, cnfiscatry taxatin, natinalisatin r ther develpments in the relevant jurisdictins culd als adversely affect the assets f the Fund Risks specific t investing in China A-shares Liquidity risks may be mre prnunced fr the A- share market than fr Chinese securities markets generally because the A-share market is subject t greater gvernment restrictins and cntrl, including trading suspensins. Securities n the A- share market, including securities in the Reference Index, may be suspended frm trading withut an indicatin f hw lng the suspensin will last, which may impair the liquidity f such securities. Price fluctuatins f A-shares are currently limited t either 5% r 10% per trading day. China impses restrictins n freign wnership r hldings. Such legal and regulatr restrictins r limitatins may have adverse effects n the liquidity and perfrmance f the Fund hldings as cmpared t the perfrmance f the Reference Index. This may increase the risk f tracking errr and impair the Fund s ability t achieve its investment bjective Risks f investing via RQFII regime The Reference Index is cmprised f A-shares. In seeking t replicate the Reference Index, the Fund intends t invest directly in A-shares thrugh VanEck s RQFII quta and Stck Cnnect. Because the Fund will nt be able t invest directly in A-shares in excess f VanEck s RQFII quta and beynd the limits that may be impsed by Stck Cnnect, the size f the Fund s direct investment in A-shares may be limited. In additin, VanEck s RQFII quta may be reduced r revked by the Chinese regulatrs if, amng ther things, VanEck fails t bserve SAFE and ther applicable Chinese regulatins. The Fund cannt predict what wuld ccur if VanEck s RQFII r RQFII qutas generally were reduced r eliminated, althugh such an ccurrence wuld likely have a material adverse effect n the Fund, including the requirement that the Fund dispse f certain r all f its A-shares hldings. Therefre, any such reductin r eliminatin may have a material adverse effect n the ability f the Fund t achieve its investment bjective resulting in VanEck changing the investment bjective f the Fund r deciding t liquidate the Fund. VanEck, as a licensed RQFII, is currently permitted t repatriate RMB daily and is nt subject t RMB repatriatin restrictins, lck-up perids r prir apprval. Hwever, there is n assurance that RQFIIs may nt be subject t restrictins r prir apprval requirements in the future. Any additinal restrictins impsed n VanEck r RQFIIs generally may have an adverse effect n the Fund s ability t invest directly in A-shares and its ability t meet redemptin requests. In the event f any default f either a lcal RQFII brker r the lcal RQFII custdian (directly r thrugh its delegate) in the executin r settlement f any transactin r in the transfer f any funds r securities in China, the Fund may encunter delays in recvering its assets which may in turn adversely impact the NAV. The RQFII plicy and rules are relatively new and there may be uncertainty as t its implementatin and such plicy and rules are subject t change. Such uncertainty and change f the laws and regulatins in China may adversely impact the Fund and such changes may als have ptential retrspective effect Risks f investing thrugh Stck Cnnect The Fund expects t make investments thrugh Stck Cnnect. The mechanism invlves "Nrthbund Trading" and "Suthbund Trading". Nrthbund Trading means trading made by Hng Kng and verseas investrs, thrugh their Hng Kng brkers and a securities trading service cmpany established by Stck Exchange f Hng Kng Limited ("SEHK"), t eligible shares listed n Shanghai Stck Exchange ("SSE") and Shenzhen Stck Exchange ("SZSE"). Suthbund Trading means trading made by Chinese investrs, thrugh Chinese securities firms and a securities trading service cmpany established by SSE/SZSE respectively, t eligible shares listed n SEHK. "Daily Quta" means the upper limit fr the difference between the buying and selling values under Stck Cnnect each day. Trading thrugh Stck Cnnect is subject t a number f restrictins that may affect the Fund s

18 VanEck Vectrs China New Ecnmy ETF PDS 18 investments and returns. Fr example, trading thrugh Stck Cnnect is subject t Daily Qutas n a first-cme-first-served basis that limit the maximum daily net purchases n any particular day, which may restrict r preclude the Fund s ability t invest in Stck Cnnect A-shares. It is cntemplated that SEHK and SSE/SZSE wuld reserve the right t suspend Nrthbund and/r Suthbund trading if necessary t ensure an rderly and fair market and that risks are managed prudently. Cnsent frm the relevant regulatr wuld be sught befre a suspensin is triggered. Where a suspensin in the Nrthbund Trading is affected, the Fund's ability t access the A-share market thrugh Stck Cnnect will be adversely affected. The list f eligible SSE/SZSE securities fr trading (buying and/r selling) thrugh the Stck Cnnect ( Eligible SSE/SZSE Securities ) cvers nly a limited number f securities traded n SSE/SZSE. The list f Eligible SSE/SZSE Securities and its admissin criteria can be revised by SEHK frm time t time. If a stck is recalled frm the list f Eligible SSE Securities fr trading via Stck Cnnect, such stck can nly be sld and cannt be bught. This may affect the Fund's ability t invest in A-shares thrugh Stck Cnnect. Furthermre, securities purchased via Stck Cnnect will be held via a bk entry mnibus accunt in the name f HKSCC, Hng Kng s clearing entity, at the CSDCC. The Fund s wnership interest in Stck Cnnect securities will nt be reflected directly in a bk entry with CSDCC and will instead nly be reflected n the bks f its Hng Kng sub-custdian. The Fund may therefre depend n HKSCC s ability r willingness as recrd-hlder f Stck Cnnect securities t enfrce the Fund s sharehlder rights. Stck Cnnect A-shares generally may nt be sld, purchased r therwise transferred ther than thrugh Stck Cnnect in accrdance with applicable rules. A primary feature f Stck Cnnect is the applicatin f the hme market s laws and rules applicable t investrs in A-shares. Therefre, the Fund s investments in Stck Cnnect A-shares are generally subject t Chinese securities regulatins and listing rules, amng ther restrictins. The Fund will nt benefit frm access t Hng Kng investr cmpensatin funds, which are set up t prtect against defaults f trades, when investing thrugh Stck Cnnect. Stck Cnnect is nly available n days when markets in bth Mainland China and Hng Kng are pen, which may limit the Fund s ability t trade when it wuld be therwise attractive t d s. See als The Stck Cnnect prgram is a relatively new prgram fr investrs frm Hng Kng and verseas t access China s stck market directly. Market participants are able t participate in this prgram subject t meeting certain infrmatin technlgy capability, risk management and ther requirements as may be specified by the relevant exchange and/r clearing huse. Market participants may need t address issues arising frm the differences n an n-ging basis. The Stck Cnnect prgram may be subject t further interpretatin and guidance. There can be n assurance as t the prgram s cntinued existence r whether future develpments regarding the prgram may restrict r adversely affect the Fund s investments r returns Security specific risk The value f a cmpany s shares which make up part f the underlying assets in the Fund can be influenced by changes in and factrs affecting cmpany management, its business envirnment r prfitability. These risks can impact the cmpany s ability t repay its debt, its prfitability and ultimately the value f its shares. By diversifying its hldings acrss multiple securities, market sectrs and cuntries, the Fund is generally insulated frm the specific risks f individual securities Currency risk The Fund invests all f its assets in investments denminated in RMB and the incme received by the Fund will principally be in RMB. RMB is currently nt freely cnvertible and is subject t exchange cntrls and restrictins. There is als the risk that unfavurable fluctuatins in the value f the Australian dllar relative t RMB will adversely affect the value f the Fund measured in Australian dllars, due t the Fund being invested in underlying securities based slely in RMB. A rise in the value f the Australian dllar relative t RMB culd decrease the value f the ETF Units and any incme received by the Fund. The Fund des nt hedge its expsure t RMB. Investments in the Fund are subject t currency risk and the value f the Fund may decrease because f unfavurable changes in currency exchange rates.