NEW YORK--(BUSINESS WIRE)--VanEck announced today that the Board of Trustees of VanEck Vectors ETF Trust has approved a 1-for-5 reverse split of the shares of VanEck Vectors High Income MLP ETF (NYSE Arca:YMLP) (the “Fund”).
The effective date of the split will be at market open on June 29, 2016. The Fund will continue to trade on the NYSE Arca under the ticker symbol “YMLP,” but the current CUSIP number (92189F551) will be discontinued and the Fund’s new CUSIP number (92189F288) will be effective June 29, 2016.
The Depository Trust Company (“DTC”), the registered owner of all Fund shares, has been notified of the reverse split and has been instructed to adjust each shareholder’s investment accordingly.
Shares of the Fund will be offered on a split-adjusted basis on June 29, 2016. The total market value of the shares outstanding will not be affected as a result of this reverse split, except with respect to the redemption of fractional shares, as discussed below.
For shareholders who hold quantities of shares that are not an exact multiple of the reverse split ratio (for example: a multiple of 5 for a 1-for-5 split), the reverse splits will result in the creation of fractional shares. Post-split fractional shares will be redeemed for cash and sent to the broker of record. This redemption may cause some shareholders to realize a gain or loss, which could be a taxable event for those shareholders. Otherwise, the reverse split will not result in a taxable transaction for shareholders of the Fund.
VanEck’s mission is to offer intelligently designed investment strategies that take advantage of targeted market opportunities. Founded in 1955, the firm is a pioneer in global investing with a history of placing clients’ interests first in all market environments. Today, VanEck continues this tradition by offering innovative active and passive investment portfolios in hard assets, emerging markets equity and debt, precious metals, fixed income, and other alternative asset classes. VanEck Vectors exchange-traded products are one of the largest ETP families in the world, managing more than 70 funds that span a range of sectors, asset classes and geographies. As of May 31, 2016, VanEck managed approximately $31.7 billion in assets, including mutual funds, ETFs, and institutional accounts.
Van Eck Securities Corporation does not provide tax, legal or accounting advice. Investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer or solicitation for the purchase or sale of any financial instrument, product or service.
An investment in the Fund may be subject to risks which include, among others, risks specific to MLPs such as tax risks, limited control of management, limited rights to vote on matters affecting the MLP, and conflict of interests between the general partner or managing member and limited partners, all of which may adversely affect the Fund. MLP investments can be affected by macro-economic and other factors affecting the stock market in general, expectations of interest rates, and factors affecting the energy sector. The complex tax nature of MLPs may adversely affect the Fund. The Fund may defer income taxes for many years on gains attributable to its underlying MLP holdings and the deferred tax liability used to calculate the Fund’s net asset value (NAV) could vary dramatically from the Fund’s actual tax liability. Upon sale of an MLP security, the Fund may be liable for previously deferred taxes and, as a result, the determination of the Fund’s actual tax liability may substantially increase expenses and lower the Fund’s NAV.
The Fund is treated as a regular corporation for federal income tax, which differs from most investment companies. Unlike traditional ETFs, the Fund is subject to U.S. federal income tax as well as state and local income taxes. Further, the amount of taxes currently paid by the Fund will vary depending on the amount of income, and gains derived from investments and/or sales of MLP interests and such taxes will reduce your return. A portion of the Fund’s distributions is expected to be treated as a return of capital for tax purposes. To the extent distributions represent a return of capital; an investor’s cost basis will be reduced at the time of sale potentially increasing taxes owed.
Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com/etf. Please read the prospectus and summary prospectus carefully before investing.
Van Eck Securities Corporation, Distributor, 666 Third Avenue, New York, NY 10017