Deep Dive into VanEck's Family History: From Gold ETF to Solana ETF

Author | jk, Odaily Star Daily

The rise of VanEck, an investment company focused on ETFs, is full of bold innovation and strategic decision-making. From launching a gold ETF to the recent Solana ETF, VanEck has constantly pushed the boundaries and driven change in the financial market. With the rapid development of the cryptocurrency market, VanEck is at the forefront of the industry, applying for a Solana ETF and opening up new investment fields for investors.

In this article, Odaily Star Daily will delve into VanEck's past success story and its decision from gold ETF to Solana ETF.

History of VanEck

In 1955, John van Eck founded Van Eck Global, taking advantage of the rising international stock market to provide investment opportunities for American investors in the background of the Marshall Plan's opening of Western Europe to American investors. His father immigrated to the United States from the Netherlands in the early 20th century. That same year, Van Eck established the first international equity mutual fund.

In 1968, the company launched one of the first Gold Funds in the United States, the International Investors Gold Fund, and shifted most of its investment portfolio to gold mining stocks. From the 1970s to the mid-1980s, gold experienced a Bull Market, and the company also achieved significant success. The International Investors Gold Fund attracted a large number of subscriptions, managing assets exceeding 1 billion U.S. dollars. John van Eck was invited to participate in popular talk shows at the time, such as the Wall Street Journal and the Merv Griffin Show.

1980 to the early 20th century: Low point

However, after the mid-1980s, the prosperity of the gold market came to an end and the company's business slowed down. By February 1998, the assets of the International Investors Gold Fund had been reduced to 250 million US dollars. John's son Jan said, 'He became a gold enthusiast. Basically, throughout my career, the value of gold has been declining, which means you are experiencing redemptions and the fund is depreciating because the price of gold has dropped from $800 per ounce to as low as $250 per ounce.'

To cope with the decline in the gold market, the company began developing investment businesses in emerging markets in Asia in the 1990s. In 1996, the company signed a joint venture protocol with the predecessor of Shenyin Wanguo, aiming to develop the fund market in China. However, the Asian financial crisis in 1997 led to a sharp decline in demand for emerging market funds. One of the company's funds, the Van Eck Asia Dynasty Fund, saw its assets under management drop from $46.3 million at the end of 1996 to $11.2 million at the end of 1997.

From 1994 to 1998, the company's managed assets decreased by 21% from $1.82 billion to $1.44 billion. In 1997, metal prices reached their lowest point in 12 years. Only its Global Hard Assets Fund achieved a positive return of 26% in the three years ending December 1997. As a result, the company faced redemptions and a shrinking client base.

After 2006

In 2006, the company decided to enter the ETF business and launched its first ETF product, Market Vectors Gold Miners ETF, which allowed investors to access the gold market through the stock market instead of investing directly in gold. Although not as popular as the SPDR Gold Shares launched in November 2004, it managed to grow its assets under management to $5 billion, becoming one of the company's largest successes. By November 2009, the company had issued more than 20 ETF products, with total assets under management reaching $9.7 billion.

John van Eck often travels overseas for business, especially in Europe. During one of his trips, he met Sigrid, a German woman 20 years younger than him, and brought her back to the United States to get married. She later became the Chief Financial Officer of VanEck and the mother of their two children. In the early 1990s, their sons Derek and Jan joined the company, and VanEck initiated a series of business initiatives, with a focus on ETFs, which brought significant rise. Since Derek's passing in 2010, Jan has been managing the company's continuously rising global business, and continues to do so till today. Jan, a graduate of Stanford Law School, was inspired by tech entrepreneurs and joined the family business, initiating the transformation towards ETFs.

Jan van Eck, "My father placed a great emphasis on economics and history, whereas I am more business-oriented, which allowed me to seize the ETF opportunity and shift towards non-active management gold funds."

In Europe, VanEck opened its first office in 2008, focusing on index business, followed by the establishment of a Swiss office in 2010, focusing on following institutional distribution and alternative and active investment management strategies. In 2018, VanEck acquired the Dutch ETF provider 'Think ETF Asset Management B.V.' to expand its ETF product portfolio in Europe and international markets.

On March 2, 2021, VanEck launched the Vectors Social Sentiment ETF on NYSE Arca, with the stock code 'BUZZ'. The fund consists of popular stocks on social media. On the first day of trading, the fund received a flow of $280 million, making it one of the top 12 best debuts in history.

To date, VanEck has issued over 100 ETFs, managing over $90 billion in assets.

VanEck's successful history, image source: VanEck official website

Gold ETF and VanEck

Gold ETF is a financial product that tracks the price of gold. It allows investors to buy and sell shares of gold through the exchange without the need to physically hold the actual gold. The emergence of Gold ETF has greatly simplified the process of investing in gold, dropping transaction costs and risks.

The first gold exchange trading product is the Central Fund of Canada, which is a closed-end fund established in 1961. The fund amended its articles of incorporation in 1983 to provide investors with products that hold physical gold and silver.

In 1968, VanEck launched the first open-end gold equity mutual fund in the United States.

In 1971, President Nixon of the United States cancelled the link between the US dollar and the gold standard. VanEck's gold fund (now known as VanEck International Investors Gold Fund) was the first of its kind, and as the price of gold soared from $35 per ounce to $800, the fund became the best performing fund in the industry.

Gold performance since 2000. Source: VanEck

Despite John's passion for gold, his son Jan van Eck realized that the company's overreliance on gold was a vulnerability. He shifted the company's focus and ventured into the ETF field. Today, ETFs account for 90% of VanEck's business.

On March 28, 2003, the first gold ETF developed by ETF Securities was listed on the Australian Securities Exchange. On November 18, 2004, State Street Corporation launched SPDR Gold Shares, which had assets of over one billion dollars within the first three trading days.

In 2006, VanEck launched its first gold ETF product, Market Vectors Gold Miners ETF, just two years after the first gold ETF in the United States. To date, the average volume of the ETF has reached around $20 million, with total net assets under management reaching $13.2 billion.

The world of VanEck encryption: the first BTC futures ETF, the first SpotETH square ETF, the first Solana ETF

VanEck is an important player in the well-known BTCETF and ETH Spot ETF. Unlike BlackRock's high approval rate, VanEck has always been labeled as the "first application, bold trial and error". On August 11, 2017, VanEck submitted an S-1 application to launch the first BTC futures ETF, becoming the first issuer to apply for investment in BTC futures. Subsequently, VanEck also unswervingly applied for the Spot BTC ETF.

However, in November 2021, the US SEC rejected the application citing concerns that potential fraud in the cryptocurrency market could spread to regulated exchanges. The application was rejected three times from 2021 to March 2023. However, VanEck persisted and finally succeeded in listing the product with the approval of the Spot BTC ETF in 2024.

Subsequently, VanEck became the first company to submit a SpotETH ETF application in 2021, almost three years after the SEC began engaging with issuance parties including BlackRock, Fidelity, and Ark Invest.

However, unlike companies like Fidelity and BlackRock, which only stick to BTC and ETH ETFs (Robert Mitchnick, head of digital assets at BlackRock, publicly stated that BlackRock believes that customers have "almost no interest" in cryptocurrencies other than BTC and ETH), VanEck has taken an extra step: applying for a Solana ETF.

At the end of June, VanEck submitted an application for a SpotSolana ETF to the United States Securities and Exchange Commission (SEC), becoming the first issuer of a Solana ETF. In a post on X platform, Matthew Sigel, VanEck's director of digital asset research, said, "The decentralization, high utility, and economic feasibility of SOL are consistent with the characteristics of other established digital assets, reinforcing our belief in SOL's potential as a valuable commodity, serving the needs of investors, developers, and entrepreneurs seeking alternatives to the dual Oligopoly application stores."

Coindesk reported, "VanEck is known for its pioneering position in the digital asset field."