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Van Eck Mutual Funds
7/29/13: The Wall Street Journal takes a look at U.S. Steel Corp.’s second-quarter results and management’s approach to running the company. Reporters consult Sam Halpert, who suggested to the company that dividing itself into multiple units might improve performance. Halpert is quoted as stating, “They said they had people on the board looking at all kinds of different possibilities.”View article »
10/24/12: The Wall Street Journal takes a look at mining companies that are cutting back on expansion efforts. “I’m looking for a company that’s going to put [cash] back into my pocket rather than spending it on something else,” says Charl Malan. View article »
6/04/12: CNBC interviews Shawn Reynolds on the energy E&P (exploration & production) sector. Reynolds likes the "international exploration story," especially Africa and Brazil.Watch video »
4/18/12: On Fast at 5, Shawn Reynolds shared two of his favorite investment themes: overseas energy exploration and unconventional oil plays.View article »
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Reversing its behavior over the previous quarter, the Fund slightly underperformed its commodity equities-based benchmark index, the Standard & Poor’s® (S&P) North American Natural Resources Sector Index (SPGINRTR), which returned 5.26%. The Fund’s performance was driven primarily by the Oil & Gas Refining & Marketing sub-sector, with further small positive contributions from the Oil & Gas Exploration & Production, Oil & Gas Equipment & Services, and Steel sub-sectors.
On a macro level, during the quarter the market had to contend with the reappearance of concerns about China. On the sector
level, Energy continued to perform strongly during the quarter. The performance of the Oil & Gas Refining & Marketing sub-sector was particularly robust, as it benefited significantly from the increase in domestic crude oil supply from unconventional resources and the beneficial impact on domestic refining margins.
The strong performance demonstrated by the Oil & Gas Exploration & Production sub-sector in the previous three quarters continued into the fourth quarter. Such performance was, however, slightly offset by concerns about lower crude oil prices during the quarter.
And while, in the third quarter, a number of larger traditional producers involved in unconventional energy resources both wrote down and divested themselves of assets, during the fourth quarter there were no further such actions of note. As in the third quarter, other, smaller companies that identified better properties earlier in the exact same places continued to thrive.
We continue to maintain the validity of our focus on the key theme of unconventional energy resources. We believe it still has a good amount of potential running room ahead of it. While we accept that it will be impacted by perceptions around the direction of oil prices, we still believe that, within our outlook for crude oil prices, the unconventional theme remains very valid.
As during the last quarter, we continue to watch the massive restructurings and strategic repositionings taking place among various big mining companies. We still believe that, if successful, these companies will pass through three phases as they shift away from growth at any cost. As we mentioned last quarter, during the second phase (once the stables have been cleansed), tangible results should start to become evident, as costs are cut and clear strategic repositioning plans executed. While we still believe that a number of the big mining companies have entered this second phase, the market will be looking not only to see who is executing, but also who is delivering. The fact that few, if any, rewards were forthcoming in this quarter goes to show that passage through this phase is by no means guaranteed plain sailing.
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Metals and Mining Analyst
Portfolio Manager, Van Eck Global Hard Assets Investment Team
Senior Analyst, Van Eck Hard Assets Investment Team
“Hard assets” refers to
the natural resources or commodities that are mined, exploited, harvested or
otherwise procured globally.
Hard assets have traditionally been
grouped into five broad categories:
Oil, natural gas, electricity, coal, and new/renewable alternative energy
2) Precious Metals Gold, silver,
palladium and platinum
3) Base/Industrial Metals Copper, aluminum, steel, iron and nickel
Agriculture Corn, wheat, sugar and water
Forest Products Timber, pulp and paper
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 distributions. 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 for more information.
1Expenses are calculated for the 12-month period ending 12/31/13: Class A: Gross 1.45% and Net 1.38%; Class C: Gross 2.21% and Net 2.20%; Class I: Gross 1.02% and Net 1.00%; and Class Y: Gross 1.16% and Net 1.13%. Expenses are capped contractually through 05/01/14 at 1.38% for Class A; 2.20% for Class C; 1.00% for Class I; and 1.13% for Class Y. Caps exclude certain expenses, such as interest.
2The S&P® North American Natural Resources Sector Index (SPGINRTR) includes mining, energy, paper and forest products, and plantation-owning companies. The S&P® 500 Index consists of 500 widely held common stocks covering industrial, utility, financial and transportation sectors. The S&P® Goldman Sachs Commodity Total Return Index (SPGSCITR) is a composite index of commodity sector returns, representing an unleveraged, long-only investment in commodity futures. 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 views and opinions expressed are those of Van Eck Global. 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 concentrating its investments in hard assets and the hard assets sector, including real estate, precious metals and natural resources, and can be significantly affected by events relating to these industries, including international political and economic developments, inflation, and other factors. The Fund’s portfolio securities may experience substantial price fluctuations as a result of these factors, and may move independently of the trends of industrialized companies. 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 and CMOs. The Fund is also subject to inflation risk, short-sales risk, market risk, non-diversification risk, leverage risk, credit risk and counterparty risk. Please see the 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. The prospectus and summary prospectus contain this and other information. Please read them carefully before investing.
Not FDIC Insured — No Bank Guarantee — May Lose Value
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