6/21/12: Morningstar interviews David Schassler, Director of Manager Research, VMAAX: "Most investors are so under allocated to alternative investments, and that’s why we are seeing publicity on alternatives, especially within mutual funds.” Watch video >>
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The Van Eck Multi-Manager Alternatives Fund seeks to achieve consistent absolute (positive) returns in various market cycles. It is a hedge-style mutual fund which can allocate among long/short equity, distressed debt, market neutral, global macro, managed futures and other alternative investment strategies.Seeks to provide consistent returns, low beta and low volatilityEmploys a mutual fund structure which provides portfolio transparency, daily valuation and liquidity, unlike many unregistered hedge fundsManaged by an investment team that averages seven years of experience in multi-manager, hedge-style mutual fund strategies
The Van Eck Multi-Manager Alternatives Fund seeks to achieve consistent absolute (positive) returns in various market cycles. It is a hedge-style mutual fund which can allocate among long/short equity, distressed debt, market neutral, global macro, managed futures and other alternative investment strategies.
*Price-to-Earnings (P/E) ratio is the price of a stock divided by its earnings per share. Price-to-Book (P/B) ratio is the ratio of a stock's price to its book value.
Co-Portfolio Managers: Jan F. van Eck and Stephen Scott
Stephen Scott, Jan F. van Eck
This investment style box is based on the Fund's overall targeted capitalization range and relative valuation as determined by Van Eck Global.
*Returns less than one year are not annualized.
The tables present past performance which is no guarantee of future results and which may be lower or higher than current performance. Returns reflect temporary contractual fee waivers and/or expense reimbursements. Had the Fund incurred all expenses and fees1, investment returns would have been reduced. Expenses: Class I: Gross 3.46% and Net 3.25%. Expenses are capped contractually through 05/01/14 at 1.95% for Class I. Investment returns and Fund share values will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost. Fund returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV.
This graph illustrates a hypothetical $10,000 investment in Class A shares of the Fund, invested at NAV. Returns reflect capital appreciation and the reinvestment of dividends and capital gains, if any, as well as all fees and expenses, but do not reflect any sales load. 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. Results reflect past performance and do not guarantee future results.
For definitions on these hedge-style strategies please visit the Commentary tab.
The table presents past performance which is no guarantee of future results and which may be lower or higher than current performance. Returns reflect temporary contractual fee waivers and/or expense reimbursements. Had the Fund incurred all expenses and fees, investment returns would have been reduced. Investment returns and Fund share values will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost. Fund returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV.
More distribution info >>
All registered investment companies, including Van Eck Associates, are obliged to distribute portfolio gains to shareholders at year-end regardless of performance. Trading Van Eck Funds will also generate tax consequences and transaction expenses. The information provided is not intended to be tax advice. Tax consequences of dividend distributions may vary by individual taxpayer. There is no guarantee that dividends will be paid. To receive a distribution, you must have been a registered shareholder of the relevant Van Eck Funds on the record date. Distributions are paid to shareholders on the payment date. Past distributions are not indicative of future distributions.
All indices listed are unmanaged and are not securities in which investments can be made.
Van Eck has been managing hedge-style investment strategies since 2003. Our multi-manager alternatives strategy oversees hedge-style investment products that invest in both hedge fund managers, as well as other hedge-style mutual funds. Van Eck’s long history of managing specialty asset classes is critical in the selection and monitoring of these managers and funds. Portfolio Managers include Jan van Eck, one of the founders of the firm’s hedge fund subsidiary, as well as Stephen Scott, an expert in fund-of-funds research and investing.
If the markets were to remain closed until January 1, 2014, history would look back on 2013 as a success. On a year-to-date basis, as of March 31, the S&P 500 Index gained 10.61% and the Dow Jones Industrial Average (DJIA) gained 11.93%. However, the year has just begun, and we remain respectful of the challenges and optimistic of the opportunities ahead. The S&P 500 Index and DJIA have now exceeded the all-time highs reached in 2007. While the return hurdles of the leverage-induced bull market have been surpassed, it begs the question – are we really better off now, or at least better than we thought we were, than in the summer of 2007?
In many regards, we believe the answer is yes, but systemic risk remains elevated due to debt burdens that have been transferred to the public sector. After the credit bubble burst, the federal government moved swiftly and powerfully to combat the deflationary pressures through both conventional and unconventional monetary and fiscal policies. Monetary intervention, in particular, has now become the lifeblood of the financial markets and it is not without costs.
Fed officials are showing concern that cheap money is inflating asset prices and encouraging risky behavior, as evidenced by the fixed income markets. Many on the Fed committee are alarmed at the threat of a looming credit bubble. The market will
continue to remain keenly focused on the liquidity lifeline that the Fed is providing the markets in the form of artificially low interest rates and any hint of a change in course could likely send the markets into panic mode.
Looking forward into the second quarter, the markets will soon focus on earnings, offering a potential catalyst to drive the markets higher assuming that the macro risks remain subdued. In the near term, the liquidity provided by the Fed should, in our opinion, continue to provide a safety net for risk assets. While we do not view the current path of inflationary monetary policies as sustainable over the long term, any withdrawal at this point in the recovery would be a cause for concern.
Strategy Review
The Fund experienced underperformance in three out of the four core investment strategies, which are: long/short equity, event driven, global macro and yield focused. Although periods of underperformance among fundamentally driven investment strategies are common, they are certainly not pleasant and are often indicative of when turmoil is lurking in the markets. We are of the firm belief that investment acumen is a skill not easily diminished and time proven investment processes are by design consistent. Therefore, while we are not happy with the recent performance, we remain committed to our sub-advisers who have been carefully selected based on their ability to perform throughout the course of the market cycle.
Read detailed 1Q'13 commentary >>
David Schassler Director of Manager Research, Multi-Manager Alternatives Investment Team
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In general, “hedge-style” strategies are advanced investment techniques that may, among other things, attempt to reduce risk and enhance returns. Typically, “hedge-style” investments have been structured as private investment vehicles known as hedge funds. Recently, however, these strategies have begun to appear in mutual fund structures as well.
At Van Eck, we group hedge-style strategies into five broad categories:
Arbitrage
Seeks to exploit price differences in identical, related or similar securities on different markets or in different forms so as to minimize overall market risk. Strategies may include convertible arbitrage, fixed income or interest rate arbitrage, pairs trading and merger arbitrage.
Equity (Long/Short)
Seeks to exploit market trends and inefficiencies in equity markets. Strategies may include equity market neutral, long-only, long/short equity and short-only.
Fixed Income (Long/Short)
Seeks to exploit market trends and inefficiencies in fixed income markets. Strategies may include long-only, long/short fixed income and distressed securities.
Global Macro
Seeks to exploit broad market trends in equities, interest rates or commodity prices. Strategies may include emerging markets, special situations and managed futures.
Tactical Allocation/Cash
Seeks to control/adjust the beta and volatility of the Fund. Selected securities, typically ETFs, are allocated (both long and short) to keep the Fund's exposures in line with the targets set by the investment committee. "Cash" refers to cash and/or cash equivalents.
More details on sales charges »
1A contingent deferred sales charge for Class A shares of 1.00% for one year applies to redemptions of qualified commissionable shares purchased after April 30, 2012, at or above the $1 million breakpoint level.
More info on account minimums »
More info on annual fund operating expenses »
You may purchase shares of Van Eck Mutual Funds indirectly through a broker/agent or directly through the Funds’ transfer agent, DST. The prospectus includes more detailed information regarding how to buy, sell, exchange or transfer shares, including how to reduce sales charges and how to choose a class of shares, plus various services for your convenience. Please read the appropriate prospectus carefully before investing.
More info/forms for purchasing shares »
© 2013 Van Eck Securities Corporation. All rights reserved.
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 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 and summary prospectus for more information.
1Expenses are calculated for the 12-month period ending 05/01/14: Class A: Gross 3.60% and Net 3.60%; Class C: Gross 43.64% and Net 4.29%; Class I: Gross 3.46% and Net 3.25%; and Class Y: Gross 3.74% and Net 3.27%. Expenses are capped contractually through 05/01/14 at 2.40% for Class A; 3.15% for Class C; 1.95% for Class I; and 2.00% for Class Y. Caps exclude certain expenses such as acquired fund fees and expenses, interest expense, trading expenses, dividends and interest payments on securities sold short, taxes and extraordinary expenses.
2The HFRX Global Hedge Fund Index is designed to be representative of the overall composition of the hedge fund universe, and includes convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value arbitrage strategies. The S&P® 500 Index consists of 500 widely held common stocks covering industrial, utility, financial and transportation sectors. 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 rather than a complete program. Because the Fund implements a fund-of-funds strategy, an investor in the Fund will bear the operating expenses of the “Underlying Funds” in which the Fund invests. The total expenses borne by an investor in the Fund will be higher than if the investor invested directly in the Underlying Funds, and the returns may therefore be lower. The Fund, the Sub-Advisers and the Underlying Funds may use aggressive investment strategies, including absolute return strategies, which are riskier than those used by typical mutual funds. If the Fund and Sub-Advisers are unsuccessful in applying these investment strategies, the Fund and you may lose more money than if you had invested in another fund that did not invest aggressively. The Fund is subject to risks associated with the Sub-Advisers making trading decisions independently, investing in other investment companies, using a particular style or set of styles, basing investment decisions on historical relationships and correlations, trading frequently, using leverage, making short sales, being non-diversified and investing in securities with low correlation to the market. The use of leverage may magnify losses. The Fund is also subject to risks associated with investments in foreign markets, emerging market securities, small cap companies, debt securities, derivatives, commodity-linked instruments, illiquid securities, asset-backed securities and CMOs. Please see the prospectus and summary prospectus for information on these as well as 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
Van Eck Securities Corporation, Distributor335 Madison Avenue, 19th FloorNew York, NY 10017800.826.2333
© 2012 Van Eck Securities Corporation. All rights reserved.