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Daily Price as of 07/14/20

NAV DAILY CHANGE
$6.07 $-0.03 / -0.5%

Class A Details: EMBAX

INCEPTION DATE GROSS/NET EXPENSES1
2.69%/1.26%

Latest Commentary

Latest Commentary

By: Eric Fine, Portfolio Manager

Emerging Markets Debt: Springtime

We outperformed our benchmark (50% J.P. Morgan EMBI-EM GD and 50% J.P. Morgan GBI-EM GD) by 45bp in April, with the fund (Class A Shares) up 3.51%. Indonesia local debt contributed the most, followed by Ghana, a corporate and Ukraine – we think this shows April as a month during which the market began searching uncorrelated opportunities. Our Indonesia local currency exposure was the biggest contributor to the positive column.

EM Debt: Playing Out, Not Played Out

We outperformed our benchmark (50% J.P. Morgan EMBI-EM GD and 50% J.P. Morgan GBI-EM GD) by 466bps in May, with the Fund (Class A Shares) up 10.28%; the details of the performance were very hopeful, in our view. Why hopeful? Overall, Angola (in USD), Mexico (in local), Argentina (in USD), Indonesia (in local) and South Africa (in local) were the big winners for the Fund in May. What is hopeful is that these performances point to: a) a reversal of the March liquidity panic; and b) the ongoing importance of country-specific developments. All of our winners have elements of both a reversal of panicked selling and country-specific positives, in varying degrees. Angola’s rally was about prices driven by panic, combined with a very supportive official lending community (see our IMF takeaways) towards Angola. Argentina’s rally was also set up by panic-driven prices combined with a country that is now clearly negotiating with creditors, not dictating terms. The rest—Mexico, Indonesia and South Africa—were largely up because they went down too much in March, but they also benefited from country-specific positives (such as high real interest rates) that our investment process is designed to capture. These contributors to performance are also hopeful, because the Fund increased its exposures here in March, so the overall thesis is arguably stronger now than it was then.

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Emerging Opportunities

Emerging Opportunities

Improvements in economic policies, strong balance sheets and improved creditworthiness of local governments continue to foster a strong case for investment in the emerging markets bonds.

 

  Emerging Market Bonds Defined 

 

“Emerging Markets Hard Currency Bonds” are bonds denominated in foreign currencies that are generally widely accepted around the world (such as the US Dollar, Euro or Yen).

 

“Emerging Markets Local Currency Bonds” are bonds denominated in the local currency of the issuer.  

 

“Emerging Markets Sovereign Bonds” are bonds issued by national governments of emerging countries in order to finance a country's growth.  

 

“Emerging Markets Quasi Sovereign Bonds” are bonds issued by corporations domiciled in emerging countries that are either 100% government owned or whose debts are 100% government guaranteed.  

 

“Emerging Markets Corporate Bonds” are bonds issued by non-government owned corporations that are domiciled in emerging countries.

 

Long term, an allocation to emerging markets bonds may provide diversification benefits as emerging markets fixed income tends to be less correlated to developed market fixed income.

Important Disclosure

*Prior to May 1, 2020, the fund was known as the VanEck Unconstrained Emerging Markets Bond Fund

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 distribution. It is the responsibility of the financial intermediary to ensure that the investor obtains the proper “breakpoint” discount. Class I and Class Y do not have an initial sales 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 1.25% for Class A, 0.95% for Class I, and 1.00% for Class Y of the Fund’s average daily net assets per year until May 1, 2021. 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 Fund's benchmark index (50% GBI-EM/50% EMBI) is a blended index consisting of 50% J.P. Morgan Government Bond Index-Emerging Markets (GBI-EM) Global Diversified and 50% J.P. Morgan Emerging Markets Bond Index (EMBI). The J.P. Morgan GBI-EM Global Diversified tracks local currency bonds issued by Emerging Markets governments. The index spans over 15 countries. The J.P. Morgan EMBI Global Diversified tracks returns for actively traded external debt instruments in emerging markets, and is also J.P. Morgan’s most liquid U.S-dollar emerging markets debt benchmark. Information has been obtained from sources believed to be reliable but J.P. Morgan does not warrant its completeness or accuracy. The Index is used with permission. The index may not be copied, used or distributed without J.P. Morgan’s written approval. Copyright 2020, J.P. Morgan Chase & Co. All rights reserved.

3Average Yield to Worst measures the lowest of either yield-to-maturity or yield-to-call date on every possible call date. Effective duration takes into account that expected cash flows will fluctuate as interest rates change. Effective maturity is the length of time until a fixed income investment returns its original investment. Distribution Yield is the amount of cash flow paid out and is calculated by dividing the annual income (interest or dividends) by the current price of the security. Averages are market weighted. These statistics do not take into account fees and expenses associated with investments or the Fund.

The views and opinions expressed are those of VanEck. 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 risks associated with its investments in below investment grade securities, credit, credit-linked notes, currency management strategies, debt securities, derivatives, emerging market securities, foreign currency transactions, foreign securities, hedging, other investment companies, Latin American issuers, management, market, non-diversification, operational, portfolio turnover, restricted securities, sectors and sovereign bond risks. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. As the Fund may invest in securities denominated in foreign currencies and some of the income received by the Fund will be in foreign currencies, changes in currency exchange rates may negatively impact the Fund’s return. Derivatives may involve certain costs and risks such as liquidity, interest rate, and the risk that a position could not be closed when most advantageous. The Fund may also be subject to risks associated with non-investment grade securities.

Investing involves risk, including possible loss of principal. Please call 800.826.2333 or visit vaneck.com for a free prospectus and summary prospectus. 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 the prospectus and summary prospectus carefully before investing.