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Opportunities Exist in Emerging Markets Despite Volatility


TOM BUTCHER: David, there has been a plethora of news reports recently about the emerging markets, most of them bad. What's the real story?


DAVID SEMPLE: You're right, Tom. Emerging markets is the asset class that a lot of people like to kick right now, when it’s down. And I think part of the issue is that we matter more nowadays, so any ills or issues that the developed world has, is being reflected back much more by the emerging markets. China, for instance, is apparently to blame for everything, even including bad weather, or whatever it happens to be. The reality is very different, because as emerging markets have gotten bigger, they've gotten more disparate, more differentiation between markets, between countries, and between companies in particular. That's the other side of the coin. For us, you have to be very specific about where you're investing in emerging markets. Gone are the days of looking at emerging markets as being a beta block, generally speaking, for global growth. Global growth has definitely ticked down a couple of notches in people's expectations, but there are still some great pockets of growth in emerging markets. You don't want to put a tag line on it, like "the new emerging markets" as that's marketing-speak. But I can say, in reality, as we look at companies, and we interview management and we kick the tires, there are some great places to invest in which really contradict this overall gloom surrounding emerging markets, which is somewhat cyclical and perhaps somewhat structural, as well. There really are some excellent opportunities out there.


BUTCHER: But if volatility continues, how would you allay investor concerns?


SEMPLE: We have seen significant volatility in the past in emerging markets. The key to us is really to stick to our philosophy about investing in emerging markets. We want to find companies that have structural growth at a reasonable price, so both characteristics help us in terms of finding companies that are going to grow more one year over the next. These companies are going to have higher operating profitability. Also, when you become invested in them at the right prices, that gives you a lot of comfort that when the volatility ceases or diminishes, you are likely to find yourself in a very good place in terms of obtaining the upside when emerging markets rebound.


BUTCHER: Great. David, thank you very much.


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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 Van Eck Funds, Market 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.


You can lose money by investing in the Van Eck Emerging Markets Fund. Any investment in the Fund should be part of an overall investment program, not a complete program. The Fund is subject to the risks associated with its investments in emerging markets securities, which tend to be more volatile and less liquid than securities traded in developed countries. The Fund’s investments in foreign securities involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, including the takeover of property without adequate compensation or imposition of prohibitive taxation. The Fund is subject to risks associated with investments in debt securities, derivatives, commodity-linked instruments, illiquid securities, asset-backed securities, CMOs and small or mid-cap companies. The Fund is also subject to inflation risk, short-sales risk, market risk, non-diversification risk and leverage risk.


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