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Digital Assets VanEck Smart Contract Leaders Fund

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Fund Overview

The Fund’s investment objective is capital appreciation, which it generally seeks to achieve by investing in "smart contract" digital assets. Smart contracts are a type of computer software that enables functions written in code and published on the blockchain to execute automatically based on predetermined conditions.

  • Diversified exposure to the largest and most liquid smart contract software protocols.
  • Smart contract platforms may serve as a lynchpin of growth-oriented portfolios.
  • Quantitative and qualitative screening will limit holdings to only the most advanced, investable digital asset ecosystems.

The Fund’s investment objective is capital appreciation, which it generally seeks to achieve by investing in “smart contract” digital assets, as described below. The value of the Shares will reflect the value of the digital assets held by the Fund (the “Fund Components”), less the Fund’s expenses and other liabilities. The Fund will value the digital assets that constitute the Fund Components based on prices of each digital asset as provided by MarketVector Indexes GmbH (“MVIS”), unless otherwise determined by the Sponsor in its sole discretion. MVIS is the index business of VanEck.

Fund Details

Inception: February 2022

Management Fee: 1.00%

Performance Fee / Redemption Fee: None

Min. Investment: $100,000

Additional Investment: $25,000

Investor Type: Qualified Purchasers

Subscriptions: Monthly

Redemptions: Quarterly (with 30 days notice)*


IMPORTANT RISKS

An investment in the Fund involves a significant degree of risk, and, therefore, should be undertaken only by investors capable of evaluating the risks of the Fund and bearing such risks. In addition, there are significant actual and potential conflicts of interests that may arise in connection with the Fund that investors should be aware of. The existence of any risk or an actual conflict may have an adverse impact on the performance of the Fund and, thus, the return to Limited Partners. Prospective investors in the Fund should carefully consider the risk factors in connection with an investment in the Fund and should consult their own legal, tax and financial advisors as to all of these risks and an investment in the Fund generally. The Interests are suitable investments only for sophisticated investors for whom an investment in the Fund does not constitute a complete investment program and who fully understand, and are willing to assume, and have the financial resources to withstand, the risks involved in the Fund's specialized investment program and to bear the potential loss of their entire investment in the Interests. Please see important definitions and disclosures below.

The General Partner may suspend or limit the right of all Limited Partners to make withdrawals under certain circumstances as laid out in the Private Placement Memorandum.

What Are Smart Contracts?

What are smart contracts? A useful tool within the blockchain, smart contracts are trackable, irreversible programs, stored on a blockchain, that self-execute when predetermined conditions are met. Smart contracts could be programmed to work for the masses, replacing certain systems, or to carry out agreements between individuals.




Important Definitions & Disclosures

* Redemptions may be suspended under certain circumstances.

The VanEck Smart Contract Leaders Fund (the “Fund”) is not an investment company registered under the Investment Company Act of 1940, and therefore is not subject to the same regulatory requirements as mutual funds or ETFs registered under the Investment Company Act of 1940. While the Fund may trade commodity futures, commodity options contracts and other CFTC Regulated Products, the general partner intends to rely on the CFTC Rule 4.13(a)(3) exemption from registration as a Commodity Pool Operator (“CPO) and at all times the Fund will meet (i) trading limitations, (ii) investor suitability requirements and (iii) offering and marketing restrictions. Before making an investment decision, you should carefully consider the risk factors and other information included in the Private Placement Memorandum.

The Fund is available to Qualified Purchasers Only. Please carefully read the Private Placement Memorandum before investing. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. The Fund has no operating history and involves a significant degree of risk. There is no guarantee the Fund will achieve its investment objective and investors may lose their entire investment. The Fund is not suitable for all investors. Past performance is not a guarantee of future results.

The Fund’s investment program is speculative and entails substantial risks. There can be no assurance that the Fund’s investment objective will be achieved.

Your individual performance may be different and will be reflected in your monthly investor statement. It is important to rely on the monthly investor statement that you receive from the fund’s Administrator, as the statement will indicate your individual performance. An individual investor’s performance may differ, perhaps materially, from the performance results set forth herein due to a number of factors, including (a) participation in new issues, (b) timing of individual contributions/ subscriptions and withdrawals/redemptions, (c) any accumulated loss carryforwards and (d) different expenses, fees and other charges paid by certain investors.

An investment in the Fund is subject to risks which include among others, risks associated with cryptocurrencies, smart contracts, complex software and programming, loss or theft of fund assets, Blockchain miners or validators, miners ceasing to mine blocks due to lack of incentive, development or acceptance of blockchain networks and assets, changes in the governance of a cryptocurrency blockchain network, long-term viability of cryptocurrencies, networks scaling challenges, concentrated ownership of digital assets, security threats, volatile price fluctuations, irreversible transactions, shallow trade volume, extreme hoarding, low liquidity and high bankruptcy risk, unsecure local storage sites, malware and data loss, public or third-party blockchain, inaccurate valuation, emergence or growth of other cryptocurrencies and/or methods of investing in cryptocurrencies, temporary or permanent “forks”, lack of banking services, geopolitical events, lack of the benefits from forks or “airdrops”, lack of regulatory protections and future regulatory developments could affect the viability and expansion of the use of the Fund.

Please contact us at investorrelations@vaneck.com for the Private Placement Memorandum which contains additional risk information.

VanEck Smart Contract Leaders Fund’s investment objective is capital appreciation, which it generally seeks to achieve by investing in “smart contract” digital assets. The MVIS CryptoCompare Smart Contract Leaders Index (MVSCLE) is designed to track the performance of the largest and most liquid smart contract assets, and is an investable subset of MVIS CryptoCompare Smart Contract Index. The MVIS CryptoCompare Ethereum Index (MVETH) covers the performance of a digital assets portfolio which invests in Ethereum. The S&P 500® (SPX) is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and covers approximately 80% of available market capitalization. The Nasdaq-100 Index (NDX) is a modified market-capitalization-weighted index composed of securities issued by 100 of the largest non-financial companies listed on the Nasdaq Stock Market.

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. The value of cryptocurrency may be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which may result in the potential for permanent and total loss of value of a particular cryptocurrency should the market for that cryptocurrency disappear. Cryptocurrencies are not covered by either FDIC or SIPC insurance. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of cryptocurrency.

Investing in cryptocurrencies comes with a number of risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. There is no assurance that a person who accepts a cryptocurrency as payment today will continue to do so in the future.

Investors should conduct extensive research into the legitimacy of each individual cryptocurrency, including its platform, before investing. The features, functions, characteristics, operation, use and other properties of the specific cryptocurrency may be complex, technical, or difficult to understand or evaluate. The cryptocurrency may be vulnerable to attacks on the security, integrity or operation, including attacks using computing power sufficient to overwhelm the normal operation of the cryptocurrency’s blockchain or other underlying technology. Some cryptocurrency transactions will be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that a transaction may have been initiated.

  • Investors must have the financial ability, sophistication and willingness to bear the risks of an investment and a potential total loss of their entire investment in cryptocurrency.
  • An investment in cryptocurrency is not suitable or desirable for all investors.
  • Cryptocurrency has limited operating history or performance.
  • Fees and expenses associated with a cryptocurrency investment may be substantial.

NFTs are not an investment. Rather, NFTs are digital memorabilia intended solely for entertainment purposes. As entertainment memorabilia given to you as a gift, NFTs have no value and are not intended by VanEck to ever have any value. Neither VanEck nor anyone else will take or not take any current or future action that is designed in any way to maintain the value of the NFTs, or to cause their value to grow or increase. You must not attempt to obtain an NFT from VanEck if you view it as an investment.

There may be risks posed by the lack of regulation for cryptocurrencies and any future regulatory developments could affect the viability and expansion of the use of cryptocurrencies. Investors should conduct extensive research before investing in cryptocurrencies.

VANECK ABSOLUTE RETURN ADVISERS CORPORATION (‘VEARA”), THE INVESTMENT MANAGER OF THE FUND, IS A MEMBER OF NFA AND IS SUBJECT TO NFA’S REGULATORY OVERSIGHT AND EXAMINATIONS. VEARA HAS ENGAGED OR MAY ENGAGE IN UNDERLYING OR SPOT VIRTUAL CURRENCY TRANSACTIONS IN THE FUND. ALTHOUGH NFA HAS JURISDICTION OVER VEARA, YOU SHOULD BE AWARE THAT NFA DOES NOT HAVE REGULATORY OVERSIGHT AUTHORITY FOR UNDERLYING OR SPOT MARKET VIRTUAL CURRENCY PRODUCTS OR TRANSACTIONS OR VIRTUAL CURRENCY EXCHANGES, CUSTODIANS OR MARKETS. YOU SHOULD ALSO BE AWARE THAT GIVEN CERTAIN MATERIAL CHARACTERISTICS OF THESE PRODUCTS, INCLUDING LACK OF A CENTRALIZED PRICING SOURCE AND THE OPAQUE NATURE OF THE VIRTUAL CURRENCY MARKET, THERE CURRENTLY IS NO SOUND OR ACCEPTABLE PRACTICE FOR NFA TO ADEQUATELY VERIFY THE OWNERSHIP AND CONTROL OF A VIRTUAL CURRENCY OR THE VALUATION ATTRIBUTED TO A VIRTUAL CURRENCY BY VEARA.

The information, views and opinions herein are those of the author(s), but not necessarily those of VanEck or its employees.

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