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11/19/14: “Due diligence in Middle East/Gulf reveals solid investments. Waiting to buy cheap? It probably won’t happen.”View more tweets >>
09/11/14: Is the tide turning for emerging markets? David Semple analyzes the emerging markets economies and believes “the asset class is on track to offer higher economic growth for the remainder of 2014 . . . and as we move into 2015.”View article >>
04/15/14: According to The Wall Street Journal, turmoil in China and Russia have curtailed gains for income-seeking funds. “Look at it from the perspective of a conservative U.S. investor who’s looking for yield,” says David Semple. “You may get your yield in due course, but you’ll get your volatility with that.”View article >>
04/10/14: Despite the hit emerging markets companies have recently taken, some money managers believe there are still worthwhile opportunities. According to David Semple, “There are state-owned businesses that deserve to trade at discounts, but you can find real growth stories that sell at reasonable prices.”View article >>
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 >>
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By: David Semple, Portfolio Manager
Fund's recent performance >>
The Van Eck Emerging Markets Fund declined 2.80% in the fourth quarter of 2014.
The signs remained positive for India in the fourth quarter following
the decisive win for the Bharatiya Janata Party (BJP) in May. The
issue now is that the country is very consensus overweight. Both
foreigners and locals are enamored with the prospects for the place
and, consequently, in the near term, valuations look challenging,
particularly relative to the rest of the emerging markets universe.
However, as inflation declines in India, we can see potential for
interest rates coming down and can also see a credit cycle taking
off. This could lead to better earnings and we would be able to
justify better valuations for those earnings.
In Indonesia, however, it still remains to be seen just how successfully
newly-elected President Joko Widodo is able to navigate
the treacherous, and ever-shifting, shoals of the country’s
parliamentary party politics. In Brazil, subsequent to Dilma
Rousseff’s somewhat less than decisive re-election as president,
the outlook domestically for the country’s economy is somewhat
pessimistic. The expectations locally are for 2015 to be a flat year
– at best. We believe, however, that this could result in Brazilian
companies being more serious about self-help and re-engineering
themselves to face a more challenging growth environment.
The big question remains: What is going to happen when interest
rates normalize in the U.S.? The prospects of inflation
do appear to be diminishing somewhat. We believe that
this may improve the prospect of emerging markets countries
reducing rates in the forthcoming year, notwithstanding rates
potentially moving up in the U.S. While this may well narrow
interest rate differentials between emerging markets countries and
the U.S., and have significant implications for emerging markets
reduced rates could increase
aggregate demand from emerging markets countries and may
create better conditions for growth.
We believe that the growth outlook for emerging markets remains
mildly better, but, rather than playing emerging markets as some
kind of “global beta,” we still need to focus on companies and
countries that have the potential to do their own “self-help” and
have their own dynamics. The Fund continues to be an actively
managed strategy, driven by stock selection. We will continue to
attempt to construct a robust, diversified portfolio that represents
long-term structural growth opportunities – “self-help compounding
investments”. And, in addition, we will never feel obliged to buy a
company just because it has a large index weighting. As we go forward, we will continue
to pursue attractive investments that we believe can deliver the
embedded growth that characterizes emerging markets countries.
Read full 4Q Commentary
David Feygenson and Patricia Gonzales
Analysts, Van Eck Emerging Markets Equity Investment Team
We look for companies that demonstrate structural growth, as opposed to cyclical growth, and at a reasonable price.
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Jan van Eck
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 Mexican energy assets and I think that's very positive in the long run.
Portfolio Manager, Van Eck Emerging Markets Equity Strategy
"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 Mexican energy assets and I think that's very positive in the long run."
Portfolio Manager, Van Eck Emerging Markets Investment Team
"There are large companies and large sectors in the emerging markets that we don't think have a particularly good outlook right now. However, we believe that we can find some opportunities that are structural growth opportunities that play on what people think they're getting with emerging markets but normally often don't achieve with many of the more index-driven products."
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.
1Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent
the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, trading expenses, dividends and
interest payments on securities sold short, taxes and extraordinary expenses) from exceeding 1.60% for Class A, 2.50% for Class C,
1.00% for Class I, and 1.10% for Class Y of the Fund’s average daily net assets per year until May 1, 2015. During such time, the
expense limitation is expected to continue until the Board of Trustees acts to discontinue all or a portion of such expense limitation.
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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