Market Vectors ETFs
Van Eck Mutual Funds
1/14/14: The FT delves into some of the investor-driven changes taking place among gold mining companies, including a shift away from continual expansion. According to Joe Foster. “You just don’t find many mega deposits in mother nature, which is one reason why the supermajor model does not work for the gold industry.”View article »
12/07/13: Barron’s conducts a roundup of four gold experts’ views on the metal’s future. “I believe the prospects for gold are strong, especially from its current oversold levels,” says Joe Foster.View article »
8/07/13: Kitco News speaks to various gold-related mutual fund portfolio managers in trying to understand the strategies of mining company managers. Joe Foster says, “They’re in austerity mode right now…I think the companies are doing what they need to do to cope with this environment.”View article »
6/26/13: CNBC’s Fast Money talks with Joe Foster about Why You Should Still Own Gold: "There's a compelling reason for investors to hold gold in their portfolios." Watch Video »
6/20/13: Commodity expert Rogers discusses with HAI’s Sumit Roy why he continues to buy gold and what he thinks needs to happen for a bull market to end. “The bull market in commodities will definitely come to an end someday. But someday is not here yet,” he says. View article »
Subscribe to email updates
Learn more on how to purchase shares of Van Eck Mutual Funds
By: Joe Foster, Portfolio Manager
Gold stocks start new year with gains; gold bullion ended January at $1,244.55.
Investors were focused on emerging markets during January on several fronts, including growth concerns in China, scandals in Turkey, and political unrest in Ukraine and Thailand. Markets are also concerned with the impact of the Federal Reserve’s actions on emerging markets. With the Fed’s first step to unwind its accommodative policies by tapering its bond purchases, the flow of money is beginning to reverse course. This potentially causes countries that are vulnerable to financial and/or political instability to have problems. As a result, global stock markets have sold-off, as many emerging markets currencies adjusted lower against the U.S. dollar. The complacency towards risk we saw in 2013 has begun to dissipate, as safe haven investments gained in January.
Gold stocks began the new-year with handsome gains. We believe there were several reasons for the strong performance. First was the safehaven bid mentioned above. Second was a rebound from oversold levels in December, when yearend selling pounded the sector to multi-year lows. Lastly there was significant acquisition activity in the space.
In our view, the gold price is in the process of forming a base and the longer it remains above $1,200 per ounce, the stronger the base becomes. Net redemptions in gold bullion exchange-traded products continued into January, but stopped around midmonth for the first time since September 2013. This should help gold stabilize, however, if net redemptions resume, then downside risk to the gold price would rise.
Several other factors are likely to affect gold in the first half of the year. Economic data has been mixed lately with positive GDP growth offset by weak data on payrolls and manufacturing. With Janet Yellen swearing in as Fed Chair, the gold market will likely be sensitive to her first actions or statements. Gold could receive a boost if there are hints of further monetary accommodation. Gold could find further support as a safe haven if recent turbulence in emerging markets should continue or worsen. Finally, we will see if strong demand for physical gold continues from China now that the Lunar New Year has passed. This demand has been critical in absorbing the heavy redemptions from the gold bullion ETPs.
We believe the current gold market is akin to the cyclical bear
market of 1975–1976. Why might we be right? Our outlook is based on the premise that
there will be unintended and highly undesirable consequences of
the massive printing of money by the Fed to buy debt securities, the
prolonging of interest rates that are far below equilibrium, and the
ongoing extraordinary buildup of federal indebtedness. These are
not sound monetary or fiscal policies. They violate any and all sense
of prudent financial management and are likely to bring unwanted
inflation in asset prices (bubbles) and/or consumer prices and/or
other dislocations in the global financial system.
January Commentary »
Senior Gold Analyst
View now »
Portfolio Manager, Van Eck International Investors Gold Fund
Portfolio Manager, Van Eck International Investors Gold Investment Team
Portfolio Manager Van Eck International Investors Gold Investment Team
As far back as 1500 BC, Egyptians and other ancient peoples used gold for currency, and its importance has not waned since. In today’s world, we may not carry gold coins in our pockets, but gold remains one of the most highly valued commodities for cultures across the globe.Sound CurrencyGold’s historic role as a sound currency alternative is recognized universally — from farmers in India whose high-carat jewelry is a form of savings, to investors in the West who accumulate coins and bars, to central bankers around the globe who hold gold in their foreign exchange reserves.Powerful Investment ToolToday, gold is recognized as a potentially powerful tool in an investment portfolio. Gold may:
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 1.29% and Net 1.29%; Class C: Gross 2.09% and Net 2.09%; Class I: Gross 0.96% and Net 0.96%; and Class Y: Gross 1.08% and Net 1.08%. Expenses are capped contractually through 05/01/14 at 1.45% for Class A; 2.20% for Class C; 1.00% for Class I; and 1.20% for Class Y. Caps exclude certain expenses, such as interest.
2The NYSE Arca Gold Miners Index (GDM) is a modified market capitalization-weighted index comprised of publicly traded companies involved primarily in mining for gold. The S&P® 500 Index, calculated with dividends reinvested, consists of 500 leading companies in leading industries of the U.S. economy. The U.S. Dollar Index (DXY) indicates the general international value of the U.S. dollar. The DXY does this by averaging the exchange rates between the U.S. dollar and six major world currencies. 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.
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 concentrating its assets in the gold industry, which can be significantly affected by international economic, monetary and political developments. The Fund’s overall portfolio may decline in value due to developments specific to the gold industry. 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 as well as 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.
Not FDIC Insured — No Bank Guarantee — May Lose Value
Van Eck Securities Corporation, Distributor335 Madison Avenue, 19th FloorNew York, NY 10017800.826.2333
© 2014 Van Eck Securities Corporation. All rights reserved.