Video Viewpoint

Seasoned investment professionals, sector-dedicated analysts, and creative thinkers are at the heart of our business. Get their perspective on today's market climate.

All Videos

Video Transcript

Political Catalysts in Emerging Markets Equities


Global Growth and EM Performance


DAVID SEMPLE: Emerging markets have done much better this year and I think that's a reflection of better global growth. It’s not clear that we're truly out of the woods yet but it certainly looks as though with most global metrics, growth is getting better. We've also had some good proximate causes of better growth, including elections in places such as India, but also China has become a more acceptable part of emerging markets for many people. Many investors think that maybe, though there are challenges, in the short to medium term, there are some tailwinds behind the Chinese growth story, which is clearly very important for the emerging markets.


 

Chinese Economic Reforms


SEMPLE: Chinese economic reform is both a temporary stimulus and a long-term opportunity. Clearly there has been some fiscal stimulus, i.e., more spending. Typically in China that means more debt. We can all be worried about that but on the other hand there are some great reforms taking place in China. The sort of pilot scheme for mixed ownership with State-Owned Enterprises (SOEs) with private parties getting involved in some of the SOE business is very positive. Hukou reform – Hukou is an official residency in Chinese cities – is changing as well. The property market is still a bit of a concern although it may be looking to stabilize now. There are many things taking place. Of course I should mention the anti-corruption drive, which ironically in the shorter term serves to bring economic growth down, but in the longer term is very positive. The ability to go after those called the tigers and the flies and the mosquitoes – in other words, the big guys, the medium guys, and the small guys – is notable and has been persistent.


 

Energy Reform in Mexico


SEMPLE: It's interesting that the emerging markets have been rewarded for their reform moves. Mexico is a country that has gotten its act together in terms of instituting reforms in areas such as energy policy. No longer is Pemex the sole developer of all of Mexican energy assets and I think that's very positive in the long run because the geology that has created such excitement in Texas doesn't stop at the borders. The benefits that U.S. industrials have provided to cheap energy will extend down to the maquiladoras in northern Mexico. That's very positive.


EM Elections


SEMPLE: India, with the election of Modi, faces a great opportunity to kick start its economy. In Indonesia the very popular Jakarta governor is now the president of Indonesia. That country clearly needs investment in infrastructure and other reform measures, which will be positive for that country.


Finding Structural Growth


SEMPLE: Structural growth for us is something for which we have a high degree of certainty that it's going to happen in one form or another. We are unsure of the trajectory, and the pricing of structural growth might be too pricey for us, but I think that structural growth is visible and means persistent growth in our lexicon. What it doesn't mean is cyclical growth. What it doesn't mean is opportunistic growth. We're looking at the longer term when we invest.


- - - - - - - - - -

IMPORTANT DISCLOSURE


The views and opinions expressed are those of the speaker and are current as of the video’s posting date. Video commentaries are general in nature and should not be construed as investment advice. Opinions are subject to change with market conditions. All performance information is historical and is not a guarantee of future results. For more information about Van Eck Funds, Market Vectors ETFs or fund performance, visit vaneck.com. Any discussion of specific securities mentioned in the video commentaries is neither an offer to sell nor a solicitation to buy these securities. Fund holdings will vary. All indices mentioned are measures of common market sectors and performance. It is not possible to invest directly in an index. Information on holdings, performance and indices can be found at vaneck.com


 

Please note that Van Eck Securities Corporation offers investment products that invest in the asset class(es) included in this video. You can lose money by investing in the Fund. Any investment in the Fund should be part of an overall investment program, not a complete program. The Fund is subject to the risks associated with its investments in emerging markets securities, which tend to be more volatile and less liquid than securities traded in developed countries. The Fund’s investments in foreign securities involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, including the takeover of property without adequate compensation or imposition of prohibitive taxation. The Fund is subject to risks associated with investments in debt securities, derivatives, commodity-linked instruments, illiquid securities, asset-backed securities, CMOs and small or mid-cap companies. The Fund is also subject to inflation risk, short-sales risk, market risk, non-diversification risk and leverage risk.


Investing involves risk, including possible loss of principal. An investor should consider investment objectives, risks, charges and expenses of the investment company carefully before investing. Bonds and bond funds will decrease in value as interest rates rise. Please read the prospectus and summary prospectus carefully before investing.


No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Van Eck Securities Corporation. © 2014 Van Eck Global.


Van Eck Securities Corporation, Distributor

335 Madison Avenue, New York, NY 10017