Multi-Manager Alternatives FundVMAIX

  • Daily Price   as of 05/22/2015

    NAV DAILY CHANGE
    $8.89  $0.01 / +0.1%
  • Class I Details: VMAIX

    INCEPTION DATE GROSS/NET EXPENSES1
    06/05/09 3.27%/2.47%
  • Quarterly Recap: 4Q 2014

    MMA Graph Analyze

    Market Review  


    The U.S. Equity market extended its gain through the fourth quarter and finished 2014 posting its sixth consecutive year of gains. The S&P 500® Index returned an impressive 4.93% in the fourth quarter and 13.69% for the year. This brings the cumulative total return of the S&P 500® Index, from the market low on March 9, 2009 to December 31, 2014, to 244.23%. Within domestic equities, during the quarter, there was a significant dispersion in returns, with small-cap stocks outperforming large-cap stocks by 4.85%. The Russell 1000 and Russell 2000 indices were used as proxies for both large- and small-cap stocks, respectively.

    In the fourth quarter, the markets experienced two notable upticks in volatility. The first spike in volatility occurred in mid-October because of weak U.S economic data that renewed the flight-to-safety trade into U.S. Treasury securities. The second volatility event occurred as the price of a barrel of oil, as measured by the WTI Crude futures contracts, began the quarter at $89.39 and finished the year at $53.27. Falling energy prices weighed heavily on companies that are involved in the development and production of energy products, with the Energy Select Sector Index returning -12.07% during the quarter. Energy prices are also a major factor in the economies of many emerging markets countries and contributed to the fourth quarter return of -4.54% for the MSCI Emerging Markets Index.

    Strategy Review  


    The Fund’s allocation to event-driven strategies during the quarter returned -0.75% vs. 1.46% for the Market Vectors Global Event Long/Short Equity Index. Our other event-driven sub-adviser, Hunting Hill Global Capital, LLC (“Hunting Hill”), contributed minimally to the performance of the Fund with a total return for the period of 0.05%.

    The Fund’s allocation to long/short equity returned 1.65% vs. 2.84% for the Market Vectors North America Long/Short Equity Index. Coe Capital Management, LLC (“Coe”) generated a return of 2.58% and benefited primarily from long equity positions in the industrials, information technology and consumer discretionary sectors, and short positions in the energy sector. Our long/short equity subadviser RiverPark Advisors, LLC was removed as an active subadviser during the period.

    The Fund’s allocation to market neutral returned 1.12% vs. 0.96% for the HFRX Equity Hedge Equity Market Neutral Index. The Van Eck Focused Market Neutral strategy implements a disciplined portfolio construction and risk-management process, with the objective of generating positive and uncorrelated returns, by leveraging the fundamental research from both the Van Eck Hard Assets and Emerging Markets Investment Teams. The top performing investments in the Focused Market Neutral strategy were hedged gold equity positions, which gained 3.69%, and emerging markets equity positions, which gained 0.26%. The largest detractors from performance were hedged energy equity positions, which lost -1.09%.

    *All weightings as of December 31, 2014.

    Read full 4Q Commentary >>  

  • Hedge-Style Strategies Defined

    Skyscrapers

    In general, “hedge-style” strategies are advanced investment techniques that may, among other things, attempt to reduce risk and enhance returns. Typically, “hedge-style” investments have been structured as private investment vehicles known as hedge funds. Recently, however, these strategies have begun to appear in mutual fund structures as well.

    At Van Eck, we group hedge-style strategies into five broad categories:

    Arbitrage

    Seeks to exploit price differences in identical, related or similar securities on different markets or in different forms so as to minimize overall market risk. Strategies may include convertible arbitrage, fixed income or interest rate arbitrage, pairs trading and merger arbitrage.

    Equity (Long/Short)

    Seeks to exploit market trends and inefficiencies in equity markets. Strategies may include equity market neutral, long-only, long/short equity and short-only.

    Fixed Income (Long/Short)

    Seeks to exploit market trends and inefficiencies in fixed income markets. Strategies may include long-only, long/short fixed income and distressed securities.

    Global Macro

    Seeks to exploit broad market trends in equities, interest rates or commodity prices. Strategies may include emerging markets, special situations and managed futures.

    Tactical Allocation/Cash

    Seeks to control/adjust the beta and volatility of the Fund. Selected securities, typically ETFs, are allocated (both long and short) to keep the Fund's exposures in line with the targets set by the investment committee. "Cash" refers to cash and/or cash equivalents.

  • Additional Resources

     
  • 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 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 Absolute Return Advisers 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 2.40% for Class A, 3.15% for Class C, 1.95% for Class I, and 2.00% for Class Y of the Fund’s average daily net assets per year until May 1, 2016. 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 HFRX Global Hedge Fund Index is designed to be representative of the overall composition of the hedge fund universe, and includes convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value arbitrage strategies. The S&P® 500 Index consists of 500 widely held common stocks covering industrial, utility, financial and transportation sectors. 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 rather than a complete program. Because the Fund implements a fund-of-funds strategy, an investor in the Fund will bear the operating expenses of the “Underlying Funds” in which the Fund invests. The total expenses borne by an investor in the Fund will be higher than if the investor invested directly in the Underlying Funds, and the returns may therefore be lower. The Fund, the Sub-Advisers and the Underlying Funds may use aggressive investment strategies, including absolute return strategies, which are riskier than those used by typical mutual funds. If the Fund and Sub-Advisers are unsuccessful in applying these investment strategies, the Fund and you may lose more money than if you had invested in another fund that did not invest aggressively. The Fund is subject to risks associated with the Sub-Advisers making trading decisions independently, investing in other investment companies, using a particular style or set of styles, basing investment decisions on historical relationships and correlations, trading frequently, using leverage, making short sales, being non-diversified and investing in securities with low correlation to the market. The use of leverage may magnify losses. The Fund is also subject to risks associated with investments in foreign markets, emerging market securities, small cap companies, debt securities, derivatives, commodity-linked instruments, illiquid securities, asset-backed securities and CMOs. 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. 

    Van Eck Securities Corporation, Distributor
    335 Madison Avenue, 19th Floor
    New York, NY 10017
    800.826.2333