VanEck Avalanche ETF Annual Report: A Year in Review

I’ve put together a simple guide to help you understand how the VanEck Avalanche ETF (VAVX) performed since its launch. Think of this as a plain-English breakdown of what’s happening under the hood, without the confusing Wall Street jargon.

1. What does this fund do?

The VanEck Avalanche ETF is a straightforward investment. Its only job is to hold the digital asset "Avalanche" (AVAX) for you. When you buy a share, you own a tiny piece of the total pile of AVAX held by the Trust.

The fund tracks the price of Avalanche, allowing you to invest in the crypto market through your regular brokerage account without needing to manage digital wallets or private keys yourself. The fund charges a 0.75% annual fee, which is taken from the fund’s assets daily. Because of this, the amount of AVAX per share slowly decreases over time to cover these costs.

2. How did the fund perform?

The fund launched on March 10, 2025. By December 31, 2025, the fund held 100,000 shares with a total value of about $2.52 million, resulting in a price per share of $25.20.

The fund is "passive," meaning it does not trade in and out of the market to make a profit; it simply holds the AVAX. While the fund has the ability to "stake" AVAX to earn rewards, it has not done so to date. Consequently, your returns are based entirely on the price movement of the AVAX held in secure, offline storage.

3. Major Risks: What could go wrong?

Because this fund tracks a digital asset, it carries unique risks:

• Extreme Price Swings: Avalanche is a digital asset with high volatility. Between March and December 2025, the price often moved more than 5% in a single day, meaning your investment value could drop significantly in a short time.
• Security Risks: Professional custodians hold the digital keys in "cold storage," meaning they are not connected to the internet. If they suffer a hack or lose these keys, your investment could be at risk, as the fund has limited insurance for digital asset theft.
• Regulatory Uncertainty: The government is still deciding how to treat digital assets. If regulators determine AVAX is an unregistered security, the fund might be forced to close, which could require you to sell your shares at an unfavorable price.
• Not a Traditional Stock: This fund is a grantor trust. It lacks the legal safety nets of a standard mutual fund, such as independent board oversight.
• Viability Risk: With $2.52 million in assets, the fund is small. If it does not grow, the gap between buying and selling prices may remain wide, making it more expensive to trade. If the fund remains too small, the sponsor might close it, forcing a sale of your holdings.

4. What’s next?

The fund is focused on keeping its holdings stable and tracking the price of AVAX using data from major exchanges. As an investor, you should monitor the "tracking error"—the difference between the fund's performance and the actual price of AVAX. If the fund remains small, the 0.75% fee and trading costs may cause the fund to perform differently than the actual price of Avalanche.

Final Thought for Investors: Before investing, consider whether the convenience of holding AVAX in a brokerage account outweighs the 0.75% annual fee and the risks associated with a small, specialized trust. Always ensure your investment aligns with your personal risk tolerance for digital assets.