Unconstrained Emerging Markets Bond FundEMBCX

  • Daily Price   as of 09/29/16

    NAV DAILY CHANGE
    $6.69 $-0.01 / -0.2%
  • Class C Details: EMBCX

    INCEPTION DATE GROSS/NET EXPENSES1
    07/09/12 2.68%/1.95%
  • Monthly Commentary: August 2016

    Angel Falls

    By: Eric Fine, Portfolio Manager

    Strengthening Headwinds Lead to Reduction in Local-Currency Debt

    The market framework we’ve used this year – real headwinds/risks set against the tailwind of relatively easy central bank policies – remains in place. However, currently, the headwinds seem to be strengthening while the tailwind of lower interest rates appears to be fading. As a result, we are in the process of adjusting the portfolio away from local-currency debt towards U.S. dollar-denominated debt and have also reduced the portfolio’s duration.

    The headwinds/risks that concern us include Europe’s fragility (one currency can’t exist without one fiscal and one financial system), China (high leverage using local-currency debt), and the potential risk of global stagflation (persistent high inflation combined with high unemployment and stagnant demand in a country’s economy), which central banks might be impotent against. The tailwind remains the loose monetary policy of developed-market central banks, which have been encouraging re-leveraging in the emerging markets, as well as risk-seeking behavior on the part of global investors looking for scarcer yield.

    Read full August Commentary

  • Video Viewpoint

    The Impact of Slowing Global Growth on Emerging Markets

    Eric Fine
    Portfolio Manager

    Eric Fine, Portfolio Manager, discusses the impact of slowing global growth on emerging markets.

    View now »


    Impact of Low or Negative Interest Rates on Global Growth

    Natalia Gurushina
    Economist, Emerging Markets Fixed Income

    "We are cognizant that growth surprises in many emerging markets have been negative. Having said that, we see several tailwinds for the growth outlook in emerging markets."

    View now »


    Takeaways from the 2015 IMF Meeting

    Eric Fine
    Portfolio Manager, Emerging Markets Fixed Income

    "The issue that the Fed’s toolbox is empty did not come up, but it probably should have come up. The Fed embarked on a big experiment in monetary policy to stem the last financial crisis, and it is not clear what the benefits have been."

    View now »


    Emerging Markets Bonds Then and Now: From Weakness to Resilience

    Eric Fine
    Portfolio Manager, Emerging Markets Fixed Income

    "The Washington Consensus resulted in higher reserves and higher growth rates among emerging markets countries. Thus EM economies moved away from the original sin of having too much dollar-denominated debt."

    View now »


    Why Unconstrained Approach to EM Bond Investing?

    Eric Fine
    Portfolio Manager, Emerging Markets Fixed Income

    "In one word, the value of an unconstrained approach to emerging markets bond portfolio investing is ‘flexibility’. The market changed a lot in the past 20 years. At first, it was only hard currency bonds. Then came hard currency corporates followed by local currency sovereigns. Nowadays, local currency corporates are becoming more prominent. Having an unconstrained mandate is key to optimizing the portfolio using all four sub asset classes."

    View now »


    No Fed Rate Change: Doves Hold Hawks at Bay

    Natalia Gurushina
    Economist

    Natalia Gurushina, Economist, explains the implications of the Fed’s September decision not to raise interest rates.

    View now »


    Is the U.S. Fed Sending Mixed Messages?

    Natalia Gurushina
    Economist, Unconstrained Emerging Markets Bond Investment Team

    View now »


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  • Emerging Opportunities

    Seedling

    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.

  • 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 or Class C 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 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.

    1Expenses are calculated for the 12-month period ending 05/01/16: Class A: Gross 1.44% and Net 1.25%; Class C: Gross 2.68% and Net 1.95%; Class I: Gross 0.94% and Net 0.94%; and Class Y: Gross 1.07% and Net 1.00%. 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 1.25% for Class A, 1.95% for Class C, 0.95% for Class I, and 1.00% for Class Y of the Fund’s average daily net assets per year until May 1, 2017. 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 Diversify 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. The 50/50 benchmark (“the Index”) is a blended index consisting of 50% J.P Morgan EMBI Global Diversified and 50% J.P. Morgan GBI-EM. The J.P. Morgan GBI-EM tracks local currency bonds issued by Emerging Markets governments. The index spans over 15 countries. 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 2014, 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 emerging markets securities. 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, market, credit, management and the risk that a position could not be closed when most advantageous. The Fund may also be subject to credit risk, interest rate risk, sovereign debt risk, tax risk, non-diversification risk and risks associated with non-investment grade securities. Please see the prospectus and summary prospectus for information on these and 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. Bond and bond funds will decrease in value as interest rates rise. The prospectus and summary prospectus contain this and other information.  Please read them carefully before investing.