Videos

Seasoned investment professionals, sector-dedicated analysts, and creative thinkers are at the heart of our business. Get their perspective on today's market climate.

Asset Allocation

Video Transcript

VanEck NDR Managed Allocation Fund Celebrates Anniversary


TOM BUTCHER: VanEck NDR Managed Allocation Fund is a year old. Can you tell me a little bit about the Fund and its first year?


DAVID SCHASSLER: Our goal was to launch a global tactical asset allocation fund that really performs well in all market environments, so we partnered with Ned Davis Research. We follow a rules-based discipline that incorporates macroeconomic, fundamental, and technical research. This is done using an objective, data-driven approach: We take the emotion out of investing. The Fund has definitely performed in line with our expectations. For the first year, we were up 11.27% versus 9.97% for our benchmark, a blended benchmark of 60% MSCI All Country World Index and 40% Barclays US Aggregate Bond Index. The one-year period was from May 11, 2016, through the end of April of this year. That put us in the top 25th percentile of the Morningstar tactical asset allocation peer group. We are pleased that the Fund has performed in line with our expectations, given its one-year milestone.


BUTCHER: There were some pretty major events last year, such as Brexit and the U.S. presidential election. How did they affect the Fund, or not?


SCHASSLER: Last year was exciting. We launched on May 11, 2016, and the Brexit vote happened at the end of June. The world was surprised when the U.K. decided to Brexit. With that decision, the U.K., in U.S. dollar terms sold off 16.5%. We had no exposure to the U.K. and very little exposure to developed Europe. This helped the Fund to perform well right out of the gate. That was the preamble to the U.S. elections. Leading into the elections, we had an 81% allocation to stocks, which is a lot for us, because our neutral allocation is 60% stocks, 40% bonds. We were all surprised when Donald Trump won. The futures that night, during the elections, gapped down around 5% for the S&P 500 Index. We thought the next day was going to be a very uncomfortable day. Luckily, the markets digested the information as a positive. Trump’s pro-growth agenda was a positive for markets. The markets took off and haven't looked back since, and the Fund has performed well.


We invest based off a rules-based model from Ned Davis Research. The model does not specifically factor in those events. What it really does is “read the tea leaves” from looking at macroeconomic, fundamental, and technical indicators and say, for example, “Maybe there's more risk than reward in Europe and, within the U.S., stocks look attractive.” That is why we performed well during those periods. Not because of those specific events. We were happy to see how the Fund managed through them.


BUTCHER: David, can you tell me a little bit more about NDR’s approach to research and the three categories of indicators that the research uses, technical, macro, and fundamental?


SCHASSLER: From a high level, what makes the discipline unique is that it incorporates macroeconomic, fundamental, and technical research. What we think of as the three pillars of investment research. Each is necessary in order to get a very comprehensive view of the markets. Macroeconomic and fundamental indicators are used to determine where the market should be going. Technical indicators are the price of the market, and quite a bit of information can be extracted from this price. It tells you where the market is now. We don't want to be wrong for too long if the market's going against us. Alternatively, if the market continues to rise, we want to participate in that as well. Incorporating the price of the market, knowing how the market's behaving is very important to this process.


BUTCHER: For the model to work, there must be a certain degree of flexibility in it?


SCHASSLER: Flexibility is a big part. We don't want to lock investors into falling markets. By that I mean, if all the indicators are saying don't own stocks, we don't want to own stocks. Therefore, the Fund can, in essence, completely remove exposure to risk assets. We can completely sell down our stock allocations, as well as our fixed income, and own 100% cash. Alternatively, if we’re in a raging bull market, we can own up to 90% stocks. There's a lot of flexibility and we think that's a really big differentiator for the Fund.


- - - - - - - - - -
IMPORTANT DISCLOSURE

The views and opinions expressed are those of the speaker and are current as of the video’s posting date. Video commentaries are general in nature and should not be construed as investment advice. Opinions are subject to change with market conditions. All performance information is historical and is not a guarantee of future results. For more information about VanEck Funds, VanEck Vectors ETFs or fund performance, visit vaneck.com. Any discussion of specific securities mentioned in the video commentaries is neither an offer to sell nor a solicitation to buy these securities. Fund holdings will vary. All indices mentioned are measures of common market sectors and performance. It is not possible to invest directly in an index. Information on holdings, performance and indices can be found at vaneck.com.


Returns less than a year are not annualized.


The performance data quoted represents 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. An Index’s performance is not illustrative of the Fund’s performance. Indices are not securities in which investments can be made. Index returns assume that dividends of the Index constituents in the Index have been reinvested. Please call 800.826.2333 or visit vaneck.com for performance information current to the most recent month end.


Fund Performance

The Fund's benchmark index (60% MSCI ACWI/40% Bloomberg Barclays US Agg) is a blended index consisting of 60% MSCI All Country World Index (ACWI) and 40% Bloomberg Barclays US Aggregate Bond Index. The MSCI ACWI captures large and mid-cap representation across 23 Developed Markets (DM) and 23 Emerging Markets (EM) countries and covers approximately 85% of the global investable equity opportunity set. The MSCI benchmark is a Gross Return index which reinvests as much as possible of a company’s gross dividend distributions. The Bloomberg Barclays US Aggregate Bond Index is a broad based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. This includes Treasuries, government-related and corporate securities, mortgage-backed securities, asset-backed securities, and collateralized mortgage-backed securities.



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 Morningstar Tactical Allocation category includes portfolios that seek to provide capital appreciation and income by actively shifting allocations across investments. These portfolios have material shifts across equity regions, and bond sectors on a frequent basis. To qualify for the tactical allocation category, the fund must have minimum exposures of 10% in bonds and 20% in equity. Next, the fund must historically demonstrate material shifts in sector or regional allocations either through a gradual shift over three years or through a series of material shifts on a quarterly basis. Within a three-year period, typically the average quarterly changes between equity regions and bond sectors exceeds 15% or the difference between the maximum and minimum exposure to a single equity region or bond sector exceeds 50%. Class A shares of the Fund ranked #79 out of 319 funds in the category for the period of May 11, 2016 through April 30, 2017.


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. All mutual funds are subject to market risk, including possible loss of principal. Because the Fund is a "fund-of-funds," an investor will indirectly bear the principal risks of the exchange-traded products in which it invests, including but not limited to, risks associated with smaller companies, foreign securities, emerging markets, debt securities, commodities, and derivatives. The Fund will bear its share of the fees and expenses of the exchange-traded products. Consequently, an investment in the Fund entails more direct and indirect expenses than a direct investment in an exchange-traded product. Because the Fund invests in exchange-traded products, it is subject to additional risks that do not apply to conventional mutual funds, including the risks that the market price of an exchange-traded product's shares may be higher or lower than the value of its underlying assets, there may be a lack of liquidity in the shares of the exchange-traded product, or trading may be halted by the exchange on which they trade. Principal risks of investing in foreign securities include changes in currency rates, foreign taxation and differences in auditing and other financial standards. Debt securities may be subject to credit risk and interest rate risk. Investments in debt securities typically decrease in value when interest rates rise. Because Van Eck Associates Corporation relies heavily on third party quantitative models, the Fund is also subject to model and data risk. For a description of these and other risk considerations, please refer to the Fund’s prospectus and Summary Prospectus, which should be read carefully before you invest.


Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.


No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Van Eck Securities Corporation. © 2017 Van Eck Securities Corporation.


Van Eck Securities Corporation, Distributor
666 Third Avenue, New York, NY 10017