VanEck’s history and leadership in gold investing exemplifies our core mission: to offer investors forward-looking, intelligently designed strategies to take advantage of targeted market opportunities.
The VanEck Approach
John van Eck started the firm in 1955, originally to invest in international stocks but with the foresight to recognize a changing landscape, he shifted his focus to gold stocks in 1968. The hyperinflation of the 1970s sparked one of the most significant gold bull markets in history while VanEck created the first publicly available gold equity mutual fund.
This pioneer strategy is managed by Portfolio Manager Joe Foster, who joined the investment team in 1996 after an extensive career as a gold exploration geologist.
- Employing this technical expertise, our consistent investment approach is rooted in fundamental research, supported by onsite visits to company mine operations.
- This industry knowledge and firsthand interaction provides a framework to evaluate companies at any phase of operational growth—from discovery and development to production.
- Our fundamental, bottom-up investment process allows the strategy to invest across the market-capitalization spectrum, from junior developers to major producers.
A unique asset, gold enhances portfolio diversification, acts as store of value, and hedges against systemic financial and geopolitical risk. The rationale for an allocation to gold and gold stocks in today’s environment has taken on greater clarity, particularly as its near-term future looks bright.
- At a macroeconomic level, extreme monetary policies, negative real interest rates, unsustainable sovereign and corporate debt levels, and diminishing dollar headwinds should continue to support higher gold prices.
- A deflationary bull market is the base case, with the move from 2008-2011 as the best reference. The post GFC move was a +150% move. If one counts $1,350 as the summer 2019 base, then $3,400 would be the price target. Of course, if we have a burst of inflation, major US economic weakness or uncertainty, prices could go much higher.
- Gold companies are healthier than they have been in 10-20 years, with low operating costs, healthy balance sheets (FCF positive and low net debt ratios), and attractive valuations.
- The Strategy maintains overweight positioning in mid-tier and junior gold mining companies (relative to peers and its benchmark). Historically, these companies have outperformed in market recoveries and/or supportive gold price environments
The over 50 year longevity of the Gold Equity strategy reflects the commitment that VanEck maintains to one of the most vital metals in the world, which continues today across both actively and passively managed solutions.