SecProbe.io

CORRESP
1
filename1.htm

Document

VanEck ETF Trust

666 Third Avenue, 9th Floor

New York, New York 10017

666 Third Avenue, 9th Floor

New York, NY 10017

MATTHEW BABINSKY                                                                                                                                         mbabinsky@vaneck.com

(212) 293-2048

February 13, 2023

U.S. Securities and Exchange Commission

Judiciary Plaza

100 F Street, N.E.

Washington, D.C. 20549

Attn: Emily Rowland, Division of Investment Management

Re:       VanEck ETF Trust (the “Trust”)

            (File Nos. 333-123257 and 811-10325)

Dear Ms. Rowland:

We are in receipt of your telephonic comments regarding the registration statement on Form N-1A (the “Registration Statement”) for the Trust with respect to VanEck Robotics ETF (the “Fund”), a series of the Trust, filed with the Securities and Exchange Commission (the “SEC”) on November 22, 2022. The Trust has considered your comments and has authorized us to make the responses and changes discussed below to the Registration Statement on its behalf. Below, we describe the changes that have been or will be incorporated into the Fund’s Registration Statement in response to the Staff of the SEC’s (the “Staff”) comments and provide any responses to or any supplemental explanations of such comments, as requested.

GENERAL

Comment 1. Please respond to all comments in a letter filed as a correspondence on EDGAR five days in advance of the 485(b) filing and email a courtesy copy of the letter to the Staff examiner along with a blacklined copy of the filing. Please remove all brackets and fill in all outstanding information prior to the 485(b) filing with the SEC. The Staff notes that the Trust and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action, or absence of action by the Staff. Please note that where a comment is made in one section of the Prospectus, such comment is applicable to similar disclosures appearing elsewhere in the Prospectus.

Response 1. We respectfully acknowledge your comment.

Comment 2. Please provide the Fund’s ticker symbol when it becomes available and update the Fund’s series and class identifiers on EDGAR as appropriate pursuant to Rule 313 of Regulation S-T.

Response 2. We hereby confirm that the Fund’s ticker symbol will be provided in the Fund’s 485(b) filing and the Fund’s series and class identifiers will be updated on the Trust’s EDGAR site concurrently with the Fund’s 485(b) filing.

- 1 -

PROSPECTUS

Comment 3. Please provide the fee table and expense example information prior to the effectiveness of the Fund’s Registration Statement.

Response 3. The “Fund Fees and Expenses” table and expense example information for the Fund are attached hereto as Exhibit A.

Comment 4. With respect to the first sentence under the “Summary Information—Principal Investment Strategies” section, please revise the disclosure to reflect the following 80% policy:

The Fund normally invests at least 80% of its total assets in securities of companies in the robotics industry.  Companies in the robotics industry are those that generate at least 50% of their revenues from, or devote at least 50% of their assets to:

•robots and manufacturing/ industrial automation systems;

•robotics surgical systems; or

•additive manufacturing or 3D printing.

Response 4. The disclosure has been revised to reflect that the Fund will normally invest at least 80% of its total assets in securities of “Robotics Companies.” We note that Section 35(d) of the Investment Company Act of 1940, as amended (the “1940 Act”) and Rule 35d-1 do not provide a standard for defining a company as a member of an industry or sector used in the fund’s name. Rather, as noted in Footnote 43 to the adopting release of Rule 35d-1 (the “Adopting Release”), “an investment company may use any reasonable definition of the terms used in its name.” We further note that none of Section 35(d) of the 1940 Act, Rule 35d-1, the Adopting Release, nor the Division of Investment Management’s Frequently Asked Questions about Rule 35d-1 (the “FAQ”) requires a fund to invest in securities of a company that has at least 50% of its assets in or derives at least 50% of its revenues from a particular industry suggested by the fund’s name, nor do they require that such a test or similar tests, if voluntarily adopted by a fund, be administered in a specific manner provided by the SEC or the Staff. We believe that based on the representation of MarketVector Indexes GmbH (the “Index provider”), the Index methodology is effectively designed to capture companies whose equity securities meet the definition of “Robotics Companies.”  We further believe the term robotics is broader than the narrow definition suggested by the Staff.

Comment 5. With respect to machine vision and semiconductor companies that offer embedded machine learning chips, the Staff believes it is not appropriate to count such companies towards compliance with the Fund’s 80% policy in light of the 25% revenue threshold for inclusion in the Index.

- 2 -

Response 5. We respectfully acknowledge your comment. As noted above, the FAQ generally suggests that, for purposes of satisfying a fund’s 80% policy adopted in compliance with Rule 35d-1, a fund is allowed to invest in securities that would provide the fund with exposure to the economic fortunes and risks of the types of investments suggested by the fund’s name. Since none of Section 35(d) of the 1940 Act, Rule 35d-1, the Adopting Release, nor the FAQ sets a formal threshold for measuring this exposure, we and the Index provider believe the 25% threshold – when combined with the additional requirements for inclusion in the Index – is appropriate since the economic fortunes and risks of such companies are inextricably linked to the robotics industry. We note that the disclosure has been revised to reflect the updated Index methodology, which clarifies that (i) with respect to machine vision companies, that such companies derive at least 50% of their revenue from machine vision technology and derive at least 25% of their revenue from the industrial or manufacturing segments and (ii) with respect to companies that offer embedded machine learning chips, such companies generate at least 25% of their revenues from the robotics sub-themes and, according to the Index provider, have products and services focused on the robotics industry as a primary business segment.

Comment 6. Please explain how the following sub-themes are considered robotics, or delete them:

•Manufacturing/ computer aided design;

•Semiconductor manufacturing systems; and

•Certain machine vision companies and certain semiconductor companies that offer embedded machine learning chips.

Are there industry classifications that include these industries in robotics?

Response 6. We respectfully acknowledge your comment. We believe that robotics is a prominent and pervasive technology that includes the above-mentioned sub-themes and note that a number of sources, which are reprinted below, support the Fund’s and Index provider’s proposed definition. We further note that the FAQ generally suggests that, for purposes of satisfying a fund’s 80% policy adopted in compliance with Rule 35d-1, such fund is allowed to invest in securities that would provide the fund with exposure to the economic fortunes and risks of the types of investments suggested by the Fund’s name. Therefore, we believe it is reasonable for the Index provider to include such companies in the Index.

Robotics1  (emphasis added):

robotics, design, construction, and use of machines (robots) to perform tasks done traditionally by human beings. Robots are widely used in such industries as automobile manufacture to perform simple repetitive tasks, and in industries where work must be performed in environments hazardous to humans. Many aspects of robotics involve artificial intelligence (software); robots may be equipped with the equivalent of human senses such as vision, touch, and the ability to sense temperature. Some are even capable of simple decision making, and current robotics research is geared toward devising robots with a degree of self-sufficiency that will permit mobility and decision-making in an unstructured environment. Today’s industrial robots do not resemble human beings; a robot in human form is called an android.

___________________________

1 Robotics | Definition, Applications, & Facts | Britannica

- 3 -

 Additionally, a variety of definitions for the three specific subthemes the Staff requested additional information about are below and support their inclusion in the robotics industry (emphasis added to each definition):

 Semi-Conductor Manufacturing Systems2  – The equipment uses robots to handle microscopic parts. Advanced robots are used in handling the wafers.

 According to Manufacturing Technology Insights3, “Using robots makes it easier for semiconductor manufacturers to manage small parts. This enables the production line to move fast across the industry. In semiconductor manufacturing, stimulating silicon wafers at high speeds without causing any damage is the priority task for robots to perform.”

 Machine vision4 – is the technology that provides image-based inspection and analysis for robots.

 Computer vision5 is the field of artificial intelligence in which programs attempt to identify objects represented in digitized images provided by cameras, thus enabling computers to “see.” Much work has been done on using deep learning and neural networks to help computers process visual information. Computers can be given a large data set of visual images and identify features and patterns within those images that the computers can then apply to other images. Such processes as facial recognition and augmented reality rely on computer vision.

 Pattern recognition6 in computer science, the imposition of identity on input data, such as speech, images, or a stream of text, by the recognition and delineation of patterns it contains and their relationships. Stages in pattern recognition may involve measurement of the object to identify distinguishing attributes, extraction of features for the defining attributes, and comparison with known patterns to determine a match or mismatch. Pattern recognition has extensive application in astronomy, medicine, robotics, and remote sensing by satellites.

 The Roboflow blog7 defines embedded machine learning as “a type of edge computing: running algorithms on end-user computational resources rather than a central data center (the cloud). Some computers built for embedded machine learning can be used for computer vision where you infer information about visual data (video and images).”

 Embedded Machine Learning8 is the technology in robots to allow them to learn autonomously from existing data and to then make independent decisions based on that data.

 ___________________________

2 Keeping Semiconductor Manufacturing Clean with Robotics (azorobotics.com)

3 How Robotics Accelerates Semiconductor Production (manufacturingtechnologyinsights.com)

4 What Is Machine Vision? (intel.la)

5 Computer vision | Definition, Examples, Applications, & Facts | Britannica

6 Pattern recognition | Definition, Applications, & Facts | Britannica

7 What is Embedded Machine Learning? (roboflow.com)

8 Embedded Machine Learning (fraunhofer.de)

- 4 -

Comment 7. With respect to the second sentence under the “Summary Information—Principal Investment Strategies” section, the prospectus states that the Index may include depositary receipts of global exchange-listed companies in the robotics industry.  Please add a corresponding risk with respect to depositary receipts.

Response 7. The disclosure has been revised accordingly.

Comment 8. The Index description refers to “robotics or manufacturing computer aided design or other software, semiconductor manufacturing systems…”  If these industries are determined to be robotics, please separate these out so that the disclosure is less confusing.

Response 8. The disclosure has been revised accordingly.

Comment 9. To the extent semiconductors companies are determined to be robotics companies, please include a corresponding risk factor for semiconductors.

Response 9. The disclosure has been revised accordingly.

Comment 10. Please add a principal risk factor relating to large capitalization companies.

Response 10. We respectfully acknowledge your comment; however, we believe that the risks associated with large capitalization companies are reflected in the “Equity Securities Risk.”

Comment 11. Please provide more information regarding the index methodology in Item 4, with more detail in Item 9.  Please disclose the capitalization requirements, if any, that the Index provider uses, and how the Index components are weighted.

Response 11. We respectfully acknowledge your comment; however, we believe this disclosure is more appropriate for the “Bluestar Robotics Index” section of the Prospectus.

Comment 12. If the Fund will have significant investments in Chinese securities, please add a corresponding risk regarding investment in Chinese securities.

Response 12. We supplementally note that the current Index has significant allocations in Japanese securities and does not have significant allocations in Chinese securities and, consequently, the disclosure has been updated accordingly.

Comment 13. With respect to the first sentence in the last paragraph under the “Summary Information—Principal Investment Strategies” section, regarding diversification, please change “may” to “will.”

Response 13. We respectfully acknowledge your comment; however, we believe the referenced disclosure is appropriate.

Comment 14. Please add a principal risk disclosure regarding investment in foreign securities, emerging markets securities, and currency risks, or explain why these risks are inapplicable.

- 5 -

Response 14. The disclosure has been revised to include principal risk disclosure regarding investment in foreign securities.  We believe that investment in emerging markets securities and currency risks will not be principal risks of the Fund because the Fund’s exposure to these risks will be limited.

Comment 15. With respect to the “Fund Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares” disclosure, the Staff notes that widened bid-ask spreads is identified as a risk of reduced liquidity. Please revise so it is clear that other risks included in the disclosure (e.g., increased market volatility and/or trading halts) may also lead to widened bid-ask spreads.

Response 15. We respectfully acknowledge your comment; however, we believe the current disclosure is appropriate.

Comment 16. With respect to the “Concentration Risk” disclosure, please revise the first sentence to state that “[t]he Fund’s assets will be concentrated....”

Response 16. We respectfully acknowledge your comment; however, we believe the referenced disclosure is appropriate.

Comment 17. Please replace all instances of “sector” or “sectors” throughout the Registration Statement with “industry” or “group of industries.”

Response 17. We respectfully acknowledge your comment; however, we believe the current language is appropriate.

Comment 18. Under the “Summary Information—Performance” section, please supplementally identify an appropriate broad-based securities market index against which the Fund will compare its performance.

Response 18. Once the Fund has one calendar year of performance, the Fund intends to include the returns of the S&P 500 Index as the broad-based securities market index.

Comment 19. With respect to the “Additional Information About the Fund’s Investment Strategies and Risks” section, according to Form N-1A, the disclosure provided pursuant to Items 4(a) and 4(b) should be a summary of the disclosure provided pursuant to Items 9(b)