4/16/13: The Wall Street Journal focuses exclusively on David Semple and the Van Eck Emerging Markets Fund (GBFAX) in a close look at the bright side of the China growth story. “For a country of its size, a GDP rate in the upper-7% range isn’t a bad number,” says Semple, “but it’s difficult to generalize since different parts of the economy are showing more promise than others.” View article >>
4/02/13: Forbes exposes the concerns of market players about the economic performance of Brazil. Examining industrial production numbers, Forbes speaks to Ed Kuczma, who says, “The numbers were not supportive for economic sentiment,” and highlights the “risk that [the] 2013 consensus GDP growth estimate of 3.1% has room to be revised downwards.” View article >>
3/07/13: The Wall Street Journal speaks to various authorities on the booming Philippines stock market. David Semple, head of international equities at Van Eck, says, “The Philippines has terrific demographics and strong domestic demand,” however, he submits that current trading multiples make “the Philippines stock market less attractive in the short term.” View article >>
2/02/13: Now that mounting inflation and government intervention in private industry are slowing down Brazil’s economy, Barron’s speaks to Ed Kuczma on where to invest. Citing several contributing factors, Ed contends that “a lot is working in favor of education [stocks] in Brazil.” View article >>
1/31/13: Bloomberg takes a look at emerging market stock performance in various developing nations, consulting Ed Kuczma on his outlook. “We continue to heavily favor names related to the consumer because with increasing incomes we get strong growth in a low-growth world.” View article >>
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Learn more on how to purchase shares of Van Eck Mutual Funds
The Van Eck Emerging Markets Fund seeks long-term capital appreciation by investing in equity securities in emerging markets around the world.A global emerging markets equity portfolio focused on companies with growth potential at a reasonable price (“GARP”)A bottom-up investment process driven by fundamental research into the sustainability of a company’s growth driversGrowth is oriented toward strong secular stories, many of which reflect domestic demand themes and are often found in smaller-capitalization stocks
The Van Eck Emerging Markets Fund seeks long-term capital appreciation by investing in equity securities in emerging markets around the world.
*Price-to-Earnings (P/E) ratio is the price of a stock divided by its earnings per share. Price-to-Book (P/B) ratio is the ratio of a stock's price to its book value.
David Semple, Portfolio Manager, is joined by Ed Kuczma (L) and Angus Shillington (R)
Edward M. Kuczma, Jr., David A. Semple, Angus Shillington
This investment style box is based on the Fund's overall targeted capitalization range and relative valuation as determined by Van Eck Global.
*Returns less than one year are not annualized.
The table presents past performance which is no guarantee of future results and which may be lower or higher than current performance. Returns reflect temporary contractual fee waivers and/or expense reimbursements. Had the Fund incurred all expenses and fees1, investment returns would have been reduced. Expenses: Class A: Gross 1.67% and Net 1.67%. Expenses are capped contractually through 05/01/14 at 1.95% for Class A. Investment returns and Fund share values will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost. Fund returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV.
The graph above illustrates a hypothetical $10,000 investment in Class A shares of the Fund, invested at NAV. Returns reflect capital appreciation and the reinvestment of dividends and capital gains, if any, as well as all fees and expenses, but do not reflect any sales load. All indices are unmanaged and include the reinvestment of all dividends, but do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. An index’s performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. Results reflect past performance and do not guarantee future results.
These are not recommendations to buy or sell any security. Sectors and holdings may vary.
The table presents past performance which is no guarantee of future results and which may be lower or higher than current performance. Returns reflect temporary contractual fee waivers and/or expense reimbursements. Had the Fund incurred all expenses and fees, investment returns would have been reduced. Investment returns and Fund share values will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost. Fund returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV.
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All registered investment companies, including Van Eck Associates, are obliged to distribute portfolio gains to shareholders at year end, regardless of performance. Trading Van Eck Funds will also generate tax consequences and transaction expenses. The information provided is not intended to be tax advice. Tax consequences of dividend distributions may vary by individual taxpayer. There is no guarantee that dividends will be paid. To receive a distribution, you must have been a registered shareholder of the relevant Van Eck Fund on the record date. Distributions are paid to shareholders on the payment date. Past distributions are not indicative of future distributions.
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Market capitalization (cap) is the value of a corporation as determined by the market price of its issued and outstanding common stock.
This graphic shows the annual returns (%) for the eight best performing country indices (1993-2012) ranked in descending order of performance. Source: MSCI, Bloomberg, Van Eck Global. Past performance does not guarantee future results. The indices’ past performance is historical and is provided to illustrate market trends. Such performance does not represent the performance of any Van Eck Fund. Indices do not charge management fees or brokerage expenses and no such fees or expenses were deducted from the performance shown. Investors cannot invest directly in an index. The performance shown for the indices does not reflect fees and charges, which are assessed with the purchase and ownership of a fund. For the calendar years from 1993 to 2012, the table shows the top eight returning country indices that, in part, comprise the MSCI Emerging Markets Index. For full description of the index, see below.
All indices listed are unmanaged and are not securities in which investments can be made.
Van Eck's emerging markets investment team seeks secular growth trends, such as domestic consumption, that contribute materially to the economic health of the emerging markets. The strategy often results in a portfolio of small- and mid-cap stocks. David Semple, a veteran of emerging markets investing, is the Fund's portfolio manager, and he is supported by analysts Angus Shillington and Ed Kuczma.
By: David Semple, Portfolio Manager
View Fund's recent performance >>
The Van Eck Emerging Markets Fund performed well in Q1, gaining 5.18%.
2013 started positively for the emerging markets (“EM”) asset class, at least for the first few days. Since then, EM equity markets have been weak, due to a range of internal and external factors. The U.S. market continues its outperformance, driven by better economic surprises, a resurgent housing market and significant de-equitization. Additionally, the Japanese move towards a muscular qualitative easing has had the long jaded Japanese analysts salivating.
Of course, the impact of each is deeper than just providing an attractive alternative investment. The better performance of U.S. corporates again highlights the work that many EM corporates have to achieve if they are to translate the good top line opportunities, from higher economic growth, into an earnings per share outcome that more or less reflects that. It also highlights that EM is more resource-heavy in terms of earnings (at least as measured by the main benchmark index) as those sectors have suffered significant downgrades in expectations. We focus the Fund on domestic demand themes, what we like to call the “heart and soul” of emerging markets and that is quite simply one of the overarching reasons for significant outperformance during the period.
We continue to have a good amount of exposure to consumer sectors, with particular emphasis on consumer discretionary, believing that consumer staples valuations are mostly too rich. Our China weighting has been pared back; Chinese stocks have started hitting our targets and we believe there is better value elsewhere. One such area is India. We are unconvinced about the macro story, but we feel we have a very good, stable yet growth-oriented portfolio of India stock, and we are comfortable being overweight compared to the benchmark. We remain much more positive on the medium term prospects for sub-Saharan Africa versus South Africa. Due to some high valuations and macro concerns, we have been very selective about our investments in Brazil, where we nonetheless think that opportunities are starting to look more attractive.
So, where are the silver linings for EM? In the short term it looks like the elements that are worth paying attention to are the strength of the dollar (strong dollar tends to be a negative for emerging markets), relative earnings revisions (we will settle for stable to slightly up), the progression of global purchasing managers indices and marginal tightening in China. Combine that with undemanding valuations, relative underperformance and more neutral/negative positioning, and we perhaps have a set up for a decent balance of the year for the asset class.
Read more 1Q'13 commentary
Ed Kuczma Emerging Markets Analyst, Van Eck Emerging Markets Investment Team
"The Mexican stock exchange has been a tremendous performer relative to other Latin American and emerging markets over the past year."
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David Semple Portfolio Manager, Van Eck Emerging Markets Investment Team
"There have been very significant inflows into emerging markets equity and debt…which can be seen as a tactical sell indicator. I think that people are starting to act on the realization that emerging markets economies are in much better shape than most developed markets economies."
Angus Shillington Emerging Markets Analyst, Van Eck Emerging Markets Investment Team
"Coming out of the heroic stimulus package of 2009, there were some big economic problems in China….at the end of last year and early this year, however, we started to see growth even-out and, in some cases, accelerate…. China's real estate market has now stabilized....it appears that the Chinese government has control of the situation."
"Indonesia and the Philippines appear very strong right now….visitors are constantly telling me about the busy shops and the tremendous amount of infrastructure building that is underway."
David Semple Portfolio Manager, Van Eck Emerging Markets Investment team
"We believe the emerging markets sector is in relatively good shape."
Ed Kuczma Emerging Markets Analyst
"Brazil has a two-speed economy right now that may favor small-caps: decreased demand for exports and natural resources, contrasted by increased domestic consumption."
"Colombia has experienced some of the strongest growth rates in Latin America.”
The expansion of domestic consumption, currently a main driver of growth potential, continues to foster a strong case for investment in the emerging markets.
Emerging Markets Defined
The term “Emerging Markets” is typically used to describe business and market activity in industrializing or emerging regions of the world. An “emerging market country” is any country that has been determined by an international organization, such as the World Bank, to have low to middle economic activity. Emerging markets often have unique economic fundamentals and cycles.
Long term, an allocation to emerging markets may provide diversification benefits as emerging markets tend to be less correlated to traditional asset classes than their developed market peers. Read more >>
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1A contingent deferred sales charge for Class A shares of 1.00% for one year applies to redemptions of qualified commissionable shares purchased after April 30, 2012 at or above the $1 million breakpoint level.
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You may purchase shares of Van Eck Mutual Funds indirectly through a broker/agent or directly through the Funds’ transfer agent, DST. The prospectus includes more detailed information regarding how to buy, sell, exchange or transfer shares, including how to reduce sales charges and how to choose a class of shares, plus various services for your convenience. Please read the appropriate prospectus carefully before investing.
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© 2013 Van Eck Securities Corporation. All rights reserved.
Important Disclosure
Unless otherwise stated, portfolio facts and statistics are shown for Class A shares; other classes may have different characteristics.
†NAV: Unless you are eligible for a waiver, the public offering price you pay when you buy Class A shares of the Fund is the Net Asset Value (NAV) of the shares plus an initial sales charge. The initial sales charge varies depending upon the size of your purchase. No sales charge is imposed where Class A or Class C shares are issued to you pursuant to the automatic investment of income dividends or capital gains distributions. It is the responsibility of the financial intermediary to ensure that the investor obtains the proper “breakpoint” discount. Class C, Class I and Class Y do not have an initial sales charge; however, Class C does charge a contingent deferred redemption charge. See the prospectus and summary prospectus for more information.
1Expenses are calculated for the 12-month period ending 05/01/14: Class A: Gross 1.67% and Net 1.67%; Class C: Gross 2.61% and Net 2.50%; Class I: Gross 2.31% and Net 1.25%; and Class Y: Gross 1.51% and Net 1.51%. Expenses are capped contractually through 05/01/14 at 1.95% for Class A; 2.50% for Class C; 1.25% for Class I; and 1.70% for Class Y. Caps exclude certain expenses, such as interest.
2The Morgan Stanley Capital International (MSCI) Emerging Markets Index, calculated with dividends reinvested, captures 60% of the publicly traded equities in each industry for approximately 25 emerging markets. The Morgan Stanley Capital International (MSCI) Emerging Markets Small Cap Index, calculated with dividends reinvested, targets companies that are not in the standard emerging markets index.
The views and opinions expressed are those of Van Eck Global. Fund manager commentaries are general in nature and should not be construed as investment advice. Opinions are subject to change with market conditions. Any discussion of specific securities mentioned in the commentaries is neither an offer to sell nor a solicitation to buy these securities. Fund holdings will vary.
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 risks associated with concentrating its investments in hard assets and the hard assets sector, including real estate, precious metals and natural resources, and can be significantly affected by events relating to these industries, including international political and economic developments, inflation, and other factors. The Fund’s portfolio securities may experience substantial price fluctuations as a result of these factors, and may move independently of the trends of industrialized companies. 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 and CMOs. The Fund is also subject to inflation risk, short-sales risk, market risk, non-diversification risk, leverage risk, credit risk and counterparty risk. Please see the prospectus and summary prospectus for information on these and other risk considerations.
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. The prospectus and summary prospectus contain this and other information. Please read them carefully before investing.
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© 2012 Van Eck Securities Corporation. All rights reserved.