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Van Eck Mutual Funds
12/05/13: CNN Money polls money managers for top stock ideas for 2014. David Semple weighs in and discusses his views on oil demand in Southeast Asia. “Oil demand from this region is clearly very strong, and this company seems to be at the center of it.” View article >>
7/01/13: InvestmentNews designates ten emerging markets funds as the "hottest" and includes the Van Eck Emerging Markets Fund. View article »
6/24/13: Bloomberg seeks the advice of emerging markets stock pickers on where to invest in a difficult environment. “We don’t think the index [MSCI Emerging Markets Index] is a very good representation of what emerging markets have become,” says David Semple. “The companies we buy [may] do very well, even in adverse situations.” View article »
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By: David Semple, Portfolio Manager
Fund's recent performance >>
The Van Eck Emerging Markets Fund gained 7.81% in the fourth quarter.
The concern over the potential withdrawal of the unprecedented
monetary accommodation that afflicted parts of emerging markets
over the summer eased during the fall. Generally, there was more
optimism that global growth was on more solid footing, while
there was also more considered reflection about the outlook for
emerging markets in a “tighter” world. The hard hit emerging
markets currencies of the so-called “fragile five” stabilized for the
most part. The commonality of these challenged countries tends to
be a combination of the need for external financing and economic
reform and poor fiscal accounts. Additionally, foreigners had
been enthusiastic buyers of credit in certain countries, and losses
came as an education for less seasoned investors. The reality of
tapering has been a little kinder to emerging markets, but there is
no question that challenges for the broad asset class remain.
China was particularly in focus this quarter, as the relatively
new leadership met to discuss challenges and priorities for the
next few years. Meanwhile politics became a significant issue in Turkey and Thailand. Though Russia is stable politically, the Russian economy disappointed in the fourth quarter and remains highly geared to the extractive industries.
The South African Rand appears to have stabilized, but an ugly string of labor stoppages orchestrated by the country’s largest labor unions, and weak global demand for South Africa’s commodity exports, persist.
In Mexico, the passage of the energy reform bill is a major
positive, allowing much more private sector involvement in
the sector. Brazil remains challenged by the Brazilian government, which continues to be criticized for its heavy intervention in the domestic economy as it tries to engineer a lower inflation. Finally, Frontier Markets continued their strong performance.
While the global economy appears stronger, it is clear that
the marginally better economic news continues to be developed
market centric. We have seen the start of tapering and we believe
that there will be much more to come as the monetary environment
(hopefully) normalizes. While we have sympathy for the argument
that better global growth will ultimately better benefit emerging
markets, we do think that the beta that they have to such growth
is diminishing. For instance, a tech supply chain that is historically
geared to hardware suffers as cloud computing gains. The
exploitation of unconventional energy resources is also a significant positive for the United States. So, the impetus for performance has, at the margin, fallen more heavily on the domestic environment in Emerging Markets. In the shorter term, politics has been a discrete issue in certain countries, while the higher cost of capital will hinder capital hungry nations.
Read full 4Q Commentary
Portfolio Manager, Van Eck Emerging Markets Fund
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Portfolio Manager, Emerging Markets Investment Team
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 >>
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 12/31/13: 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 1.00%; and Class Y: Gross 1.51% and Net 1.51%. Expenses are capped contractually through 05/01/15 at 1.95% for Class A; 2.50% for Class C; 1.00% 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 21 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 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. 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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