DAPP offers diversified exposure to companies across the digital transformation, including digital assets exchanges, miners, payment gateways, hardware, and technology providers.
VanEck today announced the launch of the VanEck Vectors® Digital Transformation ETF (NASDAQ:DAPP), a new equity fund designed to provide investors with pure-play exposure to the innovative companies that are powering the digital transformation of the world's economy.
"The digitalization of the global economy has been picking up steam for the past several years, and as digital assets1 mature, this has driven the growth of several innovative companies—not only miners of digital assets, but also digital asset exchanges, payments, services, storage, e-commerce and much more," said Ed Lopez, Managing Director, Head of ETF Product for VanEck. "To this point, however, investors have had to choose among funds that too often included companies only tangentially involved with digital assets. That is something we've sought to solve with the launch of DAPP, a fund we're very excited to be bringing to market."
DAPP seeks to track, as closely as possible, the price and yield performance of the MVIS Global Digital Assets Equity Index ("The Index"), a rules-based modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in digital assets. As the Index is designed to be a pure-play overview of the relevant players in the space, to be eligible for inclusion, a company must (i) generate at least 50% of its revenues from digital assets projects; (ii) generate at least 50% of its revenues from projects that, when developed, have the potential to generate at least 50% of their revenues from digital assets or digital asset projects; and/or (iii) have at least 50% of its assets invested in direct digital asset holdings or digital asset projects. The Index provides significant exposure to key companies in mining, hardware, exchanges, holding and trading, payment gateways, patents and services, and banking. The Fund will not invest in digital assets (including cryptocurrencies) (i) directly or (ii) indirectly through the use of digital asset derivatives. The Index rebalances quarterly.
"Digital transformation companies cover a broad swath of the investment landscape related to digital assets, well beyond what's taking place with cryptocurrencies like bitcoin. It's also important to note that digital transformation represents a long-term structural growth story, supported by significant ongoing investment and adoption on a global scale by both retail and institutional investment participants," continued Lopez. "We as a firm have long believed in the utility and viability of digital assets as an asset class, and we are thrilled to be providing investors with exposure to companies powering the digital transformation."
"Nasdaq's ETF listings business centers on working with forward-thinking partners like VanEck, who provide access to growing and innovative asset classes," added Giang Bui, Head of U.S. Exchange Traded Products at Nasdaq. "Today's launch of the VanEck Vectors Digital Transformation ETF demonstrates Nasdaq's value as a resource for growing digital asset strategies in the evolving ETF market."
DAPP, which has an expense ratio of 65 basis points, joins a VanEck thematic equity ETF lineup that also includes the VanEck Vectors Video Gaming and eSports ETF (NASDAQ:ESPO), which is the largest ETF by assets under management that provides targeted exposure to the fast-growing global video gaming and esports industries2; VanEck Vectors Gaming ETF (BJK®), which is the first ETF in the U.S. to focus on global gaming; and VanEck Vectors Semiconductor ETF (SMH®), which is designed to track the largest and most liquid semiconductor production and equipment companies, based on market capitalization and trading volume.
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 March 31, 2021, VanEck managed approximately $71.2 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
1A digital asset is an asset issued and transferred using distributed ledger or blockchain technology.
2Source: Morningstar. Data as of 3/31/21.
The Fund will not invest in digital assets (including cryptocurrencies) (i) directly or (ii) indirectly through the use of digital asset derivatives. The Fund also will not invest in initial coin offerings. Therefore the Fund is not expected to track the price movement of any digital asset.
Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund's Shares and the possibility of significant losses. An investment in the Fund involves a substantial degree of risk. An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Therefore, you should consider carefully the following risks before investing in the Fund, each of which could significantly and adversely affect the value of an investment in the Fund.
An investment in the VanEck Vectors Digital Transformation ETF may be subject to risks which include, among others, risks related to investing in digital transformation companies, investing in equity securities, Canadian issuers, small- and medium-capitalization companies, information technology and financials sectors, foreign securities, market, operational, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified and concentration risks which may make these investments volatile in price or difficult to trade. Small- and medium-capitalization companies may be subject to elevated risks.
The technology relating to digital assets, including blockchain, is new and developing and the risks associated with digital assets may not fully emerge until the technology is widely used. Digital asset technologies are used by companies to optimize their business practices, whether by using the technology within their business or operating business lines involved in the operation of the technology. The cryptographic keys necessary to transact a digital asset may be subject to theft, loss, or destruction, which could adversely affect a company's business or operations if it were dependent on the digital asset. There may be risks posed by the lack of regulation for digital assets and any future regulatory developments could affect the viability and expansion of the use of digital assets.
An investment in the VanEck Vectors Video Gaming and eSports ETF (ESPO) may be subject to risks which include, among others, investing in the video gaming and esports companies, software, internet software & services and semiconductor industries, equity securities, communication services and information technology sectors, small- and medium-capitalization companies, issuer-specific changes, special risk considerations of investing in Asian, Chinese and Japanese issuers, emerging markets issuers, foreign securities, foreign currency, depositary receipts, market, operational, cash transactions, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified, and concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Small- and medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Vectors Gaming ETF (BJK®) may be subject to risks which include, among others, investing in the gaming industry, equity securities, consumer discretionary sector, foreign securities, emerging market issuers, foreign currency, special risk considerations of investing in Asian, Chinese and European issuers, depositary receipts, small- and medium-capitalization companies, cash transactions, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified, and concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Small- and medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Vectors Semiconductor ETF (SMH®) may be subject to risks which include, among others, investing in the semiconductor industry, equity securities, foreign securities, foreign currency, depositary receipts, medium-capitalization companies, issuer-specific changes, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified, and concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Medium-capitalization companies may be subject to elevated risks.
MVIS is the index business of VanEck, a U.S. based investment management firm and provider of VanEck Vectors® ETFs. An index's performance is not illustrative of a fund's performance. Indices are not securities in which investments can be made.
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.
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