Market Vectors ETFs
Van Eck Mutual Funds
6/11/14: 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 »
4/21/14: 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 »
4/14/14: 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 »
6/03/13: 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 bullion rises on escalating geopolitical risk, ends June at $1,327.32 per ounce.
Gold advanced $77.59 (6.2%) in June. The primary driver was the
invasion of western Iraq by the radical rebel group ISIS.
The withdrawal of
U.S. troops from Iraq, ineffective diplomacy, and the current U.S.
Administration’s policy of limited engagement may have enabled
the escalating chaos and civil strife witnessed in the region. So far,
unrest in Libya, Mali, Egypt, Syria, and Iraq has not created major
disruptions in global commerce. The bulk of Iraqi oil production in
the south of the country does not appear to have been threatened.
However, problems in the region are increasing and, in our opinion,
caused upward pressure on oil prices and
downward pressure on the dollar in June, to gold’s benefit.
U.S. inflation statistics were also supportive of
gold. The Consumer Price Index rose 0.4% in May, bringing
the annualized rate for the first five months of 2014 to 2.6%, while
the core rate (excluding food and energy) stands at an annualized
2.3%. To have inflation edging higher at the same
time first quarter GDP growth fell 2.9% raises concerns. Moreover, the Fed
has been targeting 2% inflation, but it has also indicated that it
has no intention of raising interest rates until sometime in 2015. We believe gold could benefit from falling real (inflation
adjusted) interest rates.
We believe gold is showing signs of strength this
summer, during a season that normally experiences demand weakness. Geopolitical risk, in our opinion, has been
the dominant driver of the gold market this year. Problems in Turkey,
Ukraine, Thailand, and the Middle East have the potential to evolve
into broader turmoil that could impact the global economy. While
geopolitical risk is supportive of gold, historically it has not been a
longer-term driver. In our opinion, elevated levels of financial risk
are generally needed in order to generate longer-term momentum for
gold. We do see financial risks building that could become drivers as we
move into 2015.
Markets appear to be largely ignoring risk.
market continues to make all-time highs, while the future CBOE
Volatility Index and the St. Louis Fed Financial Stress Index are
near record low levels last seen in 2007. Corporate bond spreads of around 1% are also down to
2007 levels. The sovereign debt of European nations is higher now
than it was during the sovereign debt crisis, yet 10-year sovereign
yields are near record lows.
are also taking on more risk, issuing 39% more credit cards than last
year to subprime borrowers.
The Bank for International Settlements in its annual report
said “Overall, it is hard to avoid the sense of a puzzling disconnect
between the markets’ buoyancy and underlying economic
Read full June Commentary »
Joe Foster and Ima Casanova
Senior Gold Analysts
View now »
Senior Gold Analyst
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.
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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