MANAGING GROWTH IN CHINA
DAVID SEMPLE, PORTFOLIO MANAGER: The recent rate cut in China did come earlier than most people expected, but it doesn't change our view much in terms of what's happening with the Chinese economy. There is some concern that the Chinese economy has slowed a little bit more that expected, and there are some sporadic bits of news about employment issues. The Chinese government will act to mitigate the situation, and interest rate cuts is one action; reserve rate requirements is another. We believe that China will manage its growth to about the 7%, and more likely to the 7.5%, level for this year. But if the external situation gets worse, and the more the Chinese government does, then the poorer the growth will be in terms of its composition, rather than the absolute number. That's really what we're watching in China right now.
OPPORTUNITIES IN SOUTHEAST ASIA
We're talking about domestic demand in many places in the developed markets being relatively poor, certainly in the immediate future. It's important to realize that there are some pockets of very robust demand within emerging markets. And we are certainly looking at companies that are based in those countries, especially in Southeast Asia. Indonesia and the Philippines are very strong right now. All the people who go to these countries come back with breathless accounts of how busy the shops are, how many cranes are swinging round and building houses, building apartments, and building office blocks. But just because we like the growth, we have to be careful about price given that those countries are valued at a premium to the rest of the emerging markets. It's our job to make that equation between whether the growth is worth the price. That's really the heart of our investment process: growth at a reasonable price.
- - - - - - - - - -
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 Global, Market Vectors or fund performance, visit vaneck.com. 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. All indexes mentioned are measures of common market sectors and performance. It is not possible to invest directly in an index. www.vaneck.com provides for more information on holdings, performance and indices
Please note that Van Eck Securities Corporation offers investment products that invest in the asset class(es) included in this video. Hard Assets investments are subject to risks associated with real estate, precious metals, natural resources and commodities and events related to these industries, foreign investments, illiquidity, credit, interest rate fluctuations, inflation, leverage, and non-diversification.
Investing involves risk, including possible loss of principal. An investor should carefully consider investment objectives, risks, charges and expenses of the investment company before investing. Call 800.826.2333 or click below to obtain a prospectus and summary prospectus which contain this and other information. 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. ©2012 Van Eck Securities Corporation.
Van Eck Securities Corporation, Distributor
335 Madison Avenue, New York, NY 10017