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, unless otherwise determined by the Sponsor in its sole discretion. MarketVector 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 MarketVector 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 MarketVector Smart Contract Index (MVSC). The MarketVector 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.
Investments in digital assets and Web3 companies are highly speculative and involve a high degree of risk. These risks include, but are not limited to: the technology is new and many of its uses may be untested; intense competition; slow adoption rates and the potential for product obsolescence; volatility and limited liquidity, including but not limited to, inability to liquidate a position; loss or destruction of key(s) to access accounts or the blockchain; reliance on digital wallets; reliance on unregulated markets and exchanges; reliance on the internet; cybersecurity risks; and the lack of regulation and the potential for new laws and regulation that may be difficult to predict. Moreover, the extent to which Web3 companies or digital assets utilize blockchain technology may vary, and it is possible that even widespread adoption of blockchain technology may not result in a material increase in the value of such companies or digital assets.
Digital asset prices are highly volatile, and the value of digital assets, and Web3 companies, can rise or fall dramatically and quickly. If their value goes down, there’s no guarantee that it will rise again. As a result, there is a significant risk of loss of your entire principal investment.
Digital assets are not generally backed or supported by any government or central bank and are not covered by FDIC or SIPC insurance. Accounts at digital asset custodians and exchanges are not protected by SPIC and are not FDIC insured. Furthermore, markets and exchanges for digital assets are not regulated with the same controls or customer protections available in traditional equity, option, futures, or foreign exchange investing.
Digital assets include, but are not limited to, cryptocurrencies, tokens, NFTs, assets stored or created using blockchain technology, and other Web3 products.
Web3 companies include but are not limited to, companies that involve the development, innovation, and/or utilization of blockchain, digital assets, or crypto technologies.
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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