3/04/13: Forbes discusses the pros and cons of “all-in sustaining cash costs,” a new cost metric major gold producers have begun to use, and consults Van Eck’s Imaru Casanova. “This should make it much easier to derive margins for each company at any given gold price, and facilitate sector comparisons,” says Casanova, who suggests that the new measure may prove gold companies are currently more profitable than they otherwise appear.View interview >>
2/27/13: Echoing predictions from our own Joe Foster, Bloomberg examines the gold-mining industry’s pledge to make its reporting on costs more transparent to help boost investor confidence. Gold miners have underperformed the precious metal in the past six years, on the back of rising production costs, and now gold producers are incorporating new “all-in costs” to better illustrate their businesses.View interview >>
2/21/13: Investment News speaks to gold portfolio managers including Joe Foster, mentioning Van Eck International Investors Gold Fund (INIVX). “Gold thrives on financial risk and we still have so much risk out there in the financial system,” says Foster. “We still have a high conviction that we're in the midst of an ongoing gold bull market.”View interview >>
12/31/12: HAI gleans from Foster that higher 2013 gold prices and 2012’s executive changes should lift mining stocks. “Companies have come to realize they can't deliver the growth they have promised in the past. Instead, they need to focus on cost control, returns to shareholders and bottom-line profits.”View interview >>
11/21/12: Bloomberg's Pimm Fox interviews Joe Foster on the correlation between gold-mining stocks and gold. “I think this is a good entry point” into gold stocks, says Foster. “A lot of the problems that have caused the underperformance of gold stocks, I think, may turn around in the coming year.” Listen to interview >>
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The Van Eck International Investors Gold Fund seeks long-term capital appreciation by investing in common stocks of gold-mining companies. Income is a secondary consideration.An actively managed portfolio, with a 40+ year track record, that invests in gold-mining equities; geologist Joe Foster has been part of the investment team since 1996 Offers exposure to gold — a distinct asset class typically fueled by robust investment and jewelry demand, as well as ongoing supply constraintsMay provide a hedge against financial assets in volatile markets or inflationary periodsManaged by a specialized investment team that conducts continuous on- and under-the-ground research to access mining efficiencies and opportunities
The Van Eck International Investors Gold Fund seeks long-term capital appreciation by investing in common stocks of gold-mining companies. Income is a secondary consideration.
*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.
Joseph Foster, Portfolio Manager, with Senior Analysts Charl Malan and Imaru Casanova.
Imaru Casanova, Charl P. de M. Malan, Joseph Foster
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 tables present 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 C: Gross 2.09% and Net 2.09%. Expenses are capped contractually through 05/01/14 at 2.20% for Class C. 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.
For illustrative purposes only. Historical information is not indicative of future results; current data may differ from data quoted. Each index listed is unmanaged and the returns 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 any fund. An index's performance is not illustrative of any fund's performance. You cannot invest in an index.
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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 Funds 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. Market capitalization ranges listed above are specific to the gold mining industry.
This table is for illustrative purposes only, and the Fund's portfolio construction process may change over time. This table shows the typical holding and allocation range for Van Eck International Investors Gold Fund. We employ a bottom-up process that searches for: 1) organic growth; 2) value; 3) acquisition targets; and 4) strong Management. In addition, we then employ our top-down macro process that: 1) adjusts weightings to match gold price outlook; 2) seeks to increase beta with positive outlook (unhedged producers, high-cost producers, juniors); and 3) seeks to decrease gold beta with negative outlook (hedged producers, large-cap stocks, gold vehicles including bullion, ETFs, structured notes)
Van Eck has long been considered a thought leader in the gold-related investment space, with a track record of managing gold investment products dating back to 1968. The investment team employs a flexible, bottom-up approach to identify mining companies with attractive reserves and production levels. Joseph Foster has been involved in managing the firm's flagship gold fund since 1996 and is a trained geologist as well as the Fund’s portfolio manager. He is supported by senior analysts Charl Malan and Imaru Casanova.
By: Joe Foster, Portfolio Manager
Astonishing sell-off drove market lower; gold declined 7.5% in April.
Beginning on April 12, gold fell $213.50 or 13.7% in just two days due to a confluence of factors. Gold has been in a long consolidation and recently has failed to respond to some of its usual drivers. In February and March, several major investment banks called for the end of the gold bull market. Persistent redemptions in gold bullion exchange-traded products also commenced in February. By April, a record in short positions had accumulated in the COMEX futures market. On April 10, headlines suggested the Central Bank of Cyprus could sell some of its 13 tonnes in gold reserves to repay debts and Goldman Sachs recommended closing out long positions and initiating bearish bets on gold. Then on April 12 gold fell through its long-term technical support. Stop-loss selling, momentum trading, gold ETP redemptions and margin calls likely generated the selling that continued until April 16.
There has been, however, an impressive amount of physical demand that has allowed gold to cut its losses for the month. Gold bull markets are driven by investment demand and supported by physical demand for coins, small bars and jewelry. Since the April 15 crash, physical price premiums and lead times to delivery have increased to levels not seen since the selloff in 2008.
Market Outlook
While we believe April’s fall in gold is not based on fundamentals, it has nonetheless damaged sentiment and lent support to bearish analysts. As we expected, the normalization theme is losing credibility. The latest Fed comments suggest quantitative easing may continue. The president of the European Central Bank promised “our monetary policy stance will remain accommodative as long as needed.” The Bank of Japan initiated efforts to double its monetary base and stimulate inflation. These are policies that could debase currencies, creating the potential for unwanted levels of inflation or more asset bubbles.
Meanwhile, austerity is falling out of favor as many European countries fail to hit their budget deficit targets. The International Monetary Fund is encouraging the U.S. and Great Britain to slow the pace of their budget cuts. For the first time since 1999, Fitch downgraded the sovereign debt of China based on “underlying structural weakness.” Sovereign debt burdens are not going away and now China has joined the crowd. High debt levels create systemic financial and banking risks. There remain considerable risks to the financial system, the economy and the financial well-being of companies and households, but we would be very surprised if gold fails to find a catalyst that resumes its bull market trend.
Read full April Commentary >>
Imaru Casanova Metals & Mining Analyst, Van Eck International Investors Gold Investment Team
"We think gold needs to form a new base, somewhere around the $1400 level, before we see it resume its bull trend later this year."
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"They're starting to adopt a new measure referred to as all-in sustaining cash costs-- which we feel should be a better measure, it should more fully reflect the real cost of producing an ounce of gold."
Joe Foster Portfolio Manager, Van Eck International Investors Gold Investment Team
"There have been some exciting discoveries, some great drill results, come out of the Dominican Republic."
"Gold stocks, in our opinion, are under-held and under-valued, and we think this presents an opportunity going into 2013."
Joe Foster Portfolio Manager Van Eck International Investors Gold Investment Team
". . . they will scale back, re-engineer, or eliminate some of these projects in order to produce a higher bottom-line profit."
". . . the Fed telling us that it is going to keep rates at zero through the middle of 2015, which translates to negative real interest rates, is a big driver of a gold bull market."
“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. . .”
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:
More details on sales charges >>
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 1.29% 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.
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© 2012 Van Eck Securities Corporation. All rights reserved.