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Van Eck Mutual Funds
11/20/14: Barron's speaks with Joe Foster about gold and gold stocks. "Evaluating gold stocks," says Joe, "is less about valuation metrics and more about the company’s ability to grow and develop mining properties."
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06/11/14: The Gold Report interviews Joe Foster on the prospects for gold in the second half of 2014. According to Foster, the outlook for gold may be positive in light of the potential loosening of import and tax restrictions in India and stabilization in ETFs. “I think the market is in the process of finding a bottom. Gold will probably struggle through the summer, but I think $1,200/oz. should prove to be a solid floor under the gold price,” says Foster. View article »
04/21/14: Kitco News consults Joe Foster on his outlook for gold. “I see gold in the process of forming a base this year,” he says and details demand from China and production cutbacks as his primary evidence. “So there are fundamental reasons for believing that we are forming a floor here.”View article »
04/14/14: Slowing economic growth in China is working with constrained credit markets to dampen demand for gold in China. Joe Foster maintains that could change “if property values there drop sharply or if the financial system shows more signs of stress.” He adds that, “Chinese citizens have a limited range of investment options…and they have a cultural affinity toward gold.”View article »
06/03/13: Barron’s profiles Van Eck Global’s gold expert, Joe Foster, in a thoughtful piece that highlights Foster’s unique experience as a geologist in the mining industry before he joined Van Eck. Foster shares some of the insights he uses to manage the Van Eck International Investors Gold fund (INIVX). “To distinguish between the mother lode and fool’s gold, Foster studies drill reports to make his own estimates for the volume and quantity likely to come out of a mine.“ View article »
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By: Joe Foster, Portfolio Manager
Gold market finds some strength despite continued soaring dollar
Gold held its own through most of November, even though
U.S. dollar strength and gold bullion exchange-traded product
redemptions continued. The oil sell-off toward the end of the month sparked
a contagion across commodities and gold fell $32 on the day to
end the month with a $6.07 (0.5%) loss at $1,167.41 per ounce.
Since the oil situation seems to have had little to do with gold’s
fundamentals, the metal reversed its losses and gained $45 on
December 1 to close at $1,212 per ounce. Gold equities similarly rebounded from oversold levels, reversing some of their October losses.
In our last update, we mentioned that a supply response to low
prices could entail production cuts or mine closures. We met with a
number of gold producers recently and with lower gold prices now a reality, companies are articulating detailed plans to deal with
prices. We now believe that
it would take prices closer to $1,000 per ounce before we hear of
significant cuts in production. The industry should be able to maintain
mining costs and savings are likely from lower
fuel prices and lower local prices in weak-currency countries, as well as from
more cuts to general and administrative expenses,
exploration, dividends, and more capital deferrals. While we
don’t expect global output to increase in 2015, significant cuts to
production are probably off the table at current prices.
Central banks alone cannot conjure up jobs and economic growth. In my opinion, the more they try to compensate for inadequate
fiscal or overreaching regulatory policies, the more they distort
the natural incentives, checks, and balances of the free market.
Economic imbalances become excessive, wealth gets misallocated,
and asset bubbles form that can disrupt or even cripple the financial
system. We now know what a tech stock bubble and a subprime
credit bubble look like. History suggests more asset bubbles will
form, but this is not a typical cycle and typical recovery. Are all-time highs in the stock market a function
of fundamentals or stimulation from central banks? Has the 33-year
bull market in bonds gone too far?
No one knows if these are signs of impending bubbles about to
burst, but in my view, fiscal and monetary policy makers cannot
keep doing the same things and expect a different outcome.
Eventually the cycle will turn and if it happens too soon, central
banks may not have the firepower remaining to defend the
financial system. Perhaps it will take a cataclysmic failure to
generate the will and vision to create a more robust fiscal and
monetary system that immunizes the economy from extreme
periods of boom and bust. Until such a system is in place, many
choose to use gold and gold shares to diversify portfolios and to
attempt to help preserve value when tail risk becomes reality.
Read full November Commentary »
Portfolio Manager, Senior Gold Strategist
View now »
"[Companies] such as Barrick, Newmont, and AngloGold went through a period of conglomeration when large companies were merged together to create what we call "super-majors” and it's very hard to sustain the super major model."
"We've seen subdued M&A activity over the last several years due to the recent bear market in gold. This year, however, there has been a significant pickup."
Joe Foster and Ima Casanova
Gold Investment Team
"We invest across the spectrum, but in Burkina, it is mostly mid-tier and junior companies that are active. Most of Burkina’s gold deposits are moderate to smaller-sized, so we find smaller companies there. Because of the favorable operating environment, there are quite a few interesting opportunities."
"Emerging markets geopolitical risks have probably been the main driver of gold this year. People are worried about financial stability with headlines coming from Thailand, Venezuela, Ukraine, and Turkey. People are also concerned about the growth in China and the Chinese banking system."
Joe Foster and Ima Casanova
Gold Investment Team
"The market focused more on cost and operating results, and did not necessarily punish companies that missed earnings expectations"
"In the near-term, $1200 is an important technical level. The gold market fell to around the $1200 level in June of this year, and we're retesting those lows right now in the wake of the Fed announcement that they will begin tapering in 2014."
"There have been some exciting discoveries, some great drill results, come out of the Dominican Republic."
"Greece is taking a second look at mining and we are seeing some of it gold properties being developed. They have created a fast-track program for new businesses..."
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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.
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 1.45% for Class A, 2.20% 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.
Van 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 1.45% for Class A, 2.20% 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 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.
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