Assets under management in Van Eck’s recently introduced Unconstrained Emerging Markets Bond Fund (Advisor – EMBAX; Institutional - EMBUX) reached $100 million just six months after launch and now stand at $130 million.
The Fund, an actively managed, unconstrained emerging market bond mutual fund, is among the first funds mandated to invest in both local currency and hard currency denominated bonds, as well as government, quasi-government and corporate fixed income instruments.
The Fund is overseen by a dedicated team of emerging market bond specialists with a combined 50 years of experience. Lead portfolio manager Eric Fine has more than 20 years of experience analyzing and investing in emerging markets globally.
“We’re extremely pleased with investor response to our Fund,” said Fine, who has hands-on experience advising numerous governments on their economic policies and debt profiles. “The flexibility that we’ve built into the Fund’s mandate allows us to pursue the many opportunities around the globe that we now see.”
“Emerging market debt issuers are currently benefitting from improving economic fundamentals, including lower deficits, higher economic growth rates and more independent central banks,” continued Fine. “Local currency debt has been, and remains, our top focus as developed currencies struggle under weak balance sheets and poor economic policy.”
Across a universe of over 50 countries, Fine and his team seek out opportunities where bonds and/or currency valuations appear attractive relative to underlying economic and financial fundamentals – thus focusing in on divergences between fundamentals and asset prices. Since inception on July 9, 2012, through January 31, 2013, this process has led to a total return of 14.32% (Class A shares; excluding sales charge), well in excess of the 7.69% return of the J.P. Morgan Government Bond - Emerging Markets Global Diversified Index (GBI-EM) for the same time period. As of January 31, 2013, the Fund allocated to 11 countries, with Nigeria, Mexico, Russia, Indonesia and Uruguay as the top five country exposures, respectively.
As a core investment competency, Van Eck has built out its emerging markets practice over the past several years. Much of the firm’s growth in this area is attributable to the success of its Market Vectors ETFs that are focused on emerging markets debt. This includes the Emerging Markets Local Currency Bond ETF (EMLC; $1.5 billion) and Emerging Markets High Yield Bond ETF (HYEM; $43 million). Overall, fixed income ETF assets across the firm now exceed $4 billion, and have seen a 260% year-over-year increase (2011 to 2012).
|Average Annual Total Returns (%) as of January 31, 2013|
|1 Mo||3 Mo||YTD||Life|
|Class A: NAV (Inception 7/9/12)||2.94||6.99||2.94||14.32|
|Class A: Maximum 5.75% load||-2.96||0.85||-2.96||7.77|
Returns less than one year are not annualized.
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 fees1, investment returns would have been reduced. Expenses: Class A: Gross 1.91% and Net 1.25%. Expenses are capped contractually through 05/01/14 at 1.25% for Class A. Caps exclude certain expenses, such as interest. Investment returns and Fund share values will fluctuate so that investor’s 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.
About Van Eck Global
Founded in 1955, Van Eck Associates Corporation was among the first U.S. money managers helping investors achieve greater diversification through global investing. Today, the firm continues this tradition by offering innovative, actively managed investment choices in hard assets, emerging markets, precious metals including gold, and other alternative asset classes.
Market Vectors exchange-traded products have been offered by Van Eck Global since 2006 when the firm launched the nation’s first gold mining ETF. Today, Market Vectors ETFs and ETNs span several asset classes, including equities, municipal bonds and currency markets.
Van Eck Global also offers mutual funds, variable insurance products, separate accounts and alternative investments. Designed for investors seeking innovative choices for portfolio diversification, Van Eck Global’s investment products are often categorized in asset classes having returns with low correlations to those of more traditional U.S. equity and fixed income investments.
The J.P. Morgan Government Bond Index-Emerging Markets Global Diversified (GBI-EM) tracks local currency bonds issued by Emerging Markets governments. The index spans over 15 countries. The J.P. Morgan Emerging Markets Bond Index Global Diversified (EMBI) 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. One cannot invest in an index.
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 may be subject to credit risk, interest rate risk and a greater risk of loss of income and principal than higher rated securities. 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, exchange controls and economic and political changes, which may be enhanced in emerging markets. Additionally, these securities are exposed to a number of risks that may make them volatile in price or difficult to trade. 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 returns. 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 will also be subject to credit risk, interest rate risk, sovereign debt risk, tax risk, non-diversification risk and risks associated with investing in below investment grade securities, which include the risk of default, a high degree of volatility and lack of liquidity. Non-investment grade (high-yield) bonds may be subject to greater risk of loss of income and principal and are likely to be more sensitive to adverse economic changes than higher rated 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.
Van Eck Securities Corporation, Distributor
335 Madison Avenue, 19th Floor
New York, NY 10017