US Financials Excel in July

For the Month Ending 31 July 2017

Performance Overview

US moats maintained their YTD outperformance (4.22% versus 1.21%), despite retreating slightly in July. For the month, the Morningstar^® Wide Moat Focus Index^TM (MOAT Index) trailed the S&P 500^® Index falling 3.04%versus the market’s fall of 1.95%.

Performance attribution: Healthcare fatigue

The US Moat Index's healthcare allocation delivered mixed performance and finished July relatively flat. Pharmaceutical and biotech names fared well during the month led by Gilead Sciences, Inc. (GILD US, +7.50%), and Biogen, Inc. (BIIB US, +6.72%). By contrast, medical distributors and pharmacy benefits managers such as Patterson Companies, Inc. (PDCO US, -10.60%) and Express Scripts (ESRX US, -1.88%) have struggled recently.

In other sectors, several financials firms excelled in July led by investment manager T. Rowe Price Group (TROW US, +11.47%) which boasted record levels of assets under management. Wells Fargo & Company (WFC US, -2.65%) was the only financial company to post negative returns in July, as it continues to be dogged by the fallout from overly aggressive past sales practices. Consumer discretionary was the top detracting sector for the US Moat Index in July given poor results from L. Brands, Inc. (LB US, -13.92%). Victoria's Secret, L. Brands' top product line, saw second quarter sales decrease by 12%.

^{Important Disclosures}

^{This commentary is not intended as a recommendation to buy or sell any of the named securities. Holdings will vary for MOAT and MOAT Index.}

^{Issued by VanEck Investments Limited ABN 22 146 596 116 AFSL 416755 (‘VanEck’). VanEck is a wholly owned subsidiary of Van Eck Associates Corporation based in New York, United States. VanEck Vectors ETF Trust ARBN 604 339 808 (the ‘Trust’) is the issuer of shares in the VanEck Vectors Morningstar Wide Moat ETF (‘US Fund’). The Trust and the US Fund are regulated by US laws which differ from Australian laws. Trading in the US Fund’s shares on ASX will be settled by CHESS Depositary Interests (‘CDIs’) which are also issued by the Trust. The Trust is organised in the State of Delaware, US. Liability of investors is limited. VanEck Associates serves as the investment adviser to the US Fund. VanEck, on behalf of the Trust, is the authorised intermediary for the offering of CDIs over the US Fund’s shares and issuer in respect of the CDIs and corresponding Fund’s shares traded on ASX.}

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