ck0000768847-20221231
VanEck
Funds
Emerging Markets Fund
Class
A: GBFAX / Class C: EMRCX / Class I: EMRIX / Class Y: EMRYX / Class Z: EMRZX
Emerging Markets Leaders
Fund
Class
A: ELMAX / Class I: ELMIX / Class Y: ELMYX / Class Z: ELMZX
Environmental Sustainability Fund
Class
A: ENVAX / Class I: ENVIX / Class Y: ENVYX
Global Resources Fund
Class
A: GHAAX / Class C: GHACX / Class I: GHAIX / Class Y: GHAYX
International Investors Gold
Fund
Class
A: INIVX / Class C: IIGCX / Class I: INIIX / Class Y: INIYX
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The
U.S. Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the accuracy or adequacy of this
Prospectus. Any representation to the contrary is a criminal
offense. |
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800.826.2333 vaneck.com
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TABLE
OF CONTENTS |
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I. Summary Information |
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Emerging Markets Fund (Class A, C,
I, Y, Z) |
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Emerging Markets Leaders Fund (Class
A, I, Y, Z) |
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Environmental Sustainability Fund
(Class A, I, Y) |
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Global Resources Fund (Class A, C,
I, Y) |
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International Investors Gold Fund
(Class A, C, I, Y) |
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II. Investment Objectives, Strategies,
Policies, Risks and Other Information |
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1. Investment
Objectives |
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2. Additional Information About
Principal Investment Strategies and Risks |
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3. Additional Investment
Strategies |
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4. Other Information and
Policies |
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III. Shareholder Information |
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1. How to Buy, Sell, Exchange or
Transfer Shares |
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2. How to Choose a Class of
Shares |
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3. Sales Charges |
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4. Householding of Reports and
Prospectuses |
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5. Retirement Plans |
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6. Federal Income
Taxes |
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7. Dividends and Capital Gains
Distributions |
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8. Management of the Funds and
Service Providers |
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IV. Financial Highlights |
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Appendix A: Intermediary Sales
Charge Discounts and Waivers |
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INVESTMENT OBJECTIVE
The Emerging Markets Fund
seeks long-term capital appreciation by investing primarily in equity securities
in emerging markets around the world.
FUND FEES AND EXPENSES
This
table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund. You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
You may qualify for Class A sales charge
discounts if you and your family (includes spouse and children under age 21)
invest, or agree to invest in the future, at least $25,000, in the
aggregate, in Classes A and C of the VanEck
Funds. More
information about these and other discounts is available from your financial
professional and in the “Shareholder Information-Sales Charges” section of this
prospectus, in the “Availability of Discounts” section of the Fund’s Statement
of Additional Information (“SAI”) and, with respect to purchases of shares
through specific intermediaries, in Appendix A to this prospectus, entitled
“Intermediary Sales Charge Discounts and Waivers”. Investors
may pay commissions and/or other forms of compensation to an intermediary, such
as a broker, for transactions in Class Z shares, which are not reflected in the
table or the example below.
Shareholder
Fees
(fees
paid directly from your investment)
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Class
A |
Class
C |
Class
I |
Class
Y |
Class
Z |
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Maximum
Sales Charge (load) imposed on purchases (as a percentage of offering
price) |
5.75% |
0.00% |
0.00% |
0.00% |
0.00% |
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Maximum
Deferred Sales Charge (load) (as a percentage of the lesser of the net
asset value or purchase price) |
0.00%¹ |
1.00% |
0.00% |
0.00% |
0.00% |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Class
A |
Class
C |
Class
I |
Class
Y |
Class
Z |
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Management
Fees |
0.75% |
0.75% |
0.75% |
0.75% |
0.75% |
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Distribution
and/or Service (12b-1) Fees |
0.25% |
1.00% |
0.00% |
0.00% |
0.00% |
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Other
Expenses |
0.54% |
0.68% |
0.44% |
0.46% |
0.42% |
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Total
Annual Fund Operating Expenses |
1.54% |
2.43% |
1.19% |
1.21% |
1.17% |
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Fee
Waivers and/or Expense Reimbursements2 |
0.00% |
0.00% |
-0.18% |
-0.10% |
-0.26% |
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Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursements |
1.54% |
2.43% |
1.01% |
1.11% |
0.91% |
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1
A contingent deferred
sales charge for Class A shares of 1.00% for one year applies to redemptions of
qualified commissionable shares purchased at or above the $1 million breakpoint
level.
2
Van Eck Associates
Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to
the extent necessary to prevent the operating expenses of the Fund (excluding
acquired fund fees and expenses, interest expense, trading expenses, dividends
and interest payments on securities sold short, taxes and extraordinary
expenses) from exceeding 1.60% for Class A, 2.50% for Class C, 1.00% for Class
I, 1.10% for Class Y, and 0.90% for Class Z of the Fund’s average daily net
assets per year until May 1,
2024. During such time, the expense limitation is expected to
continue until the Board of Trustees acts to discontinue all or a portion of
such expense limitation.
EXPENSE EXAMPLE
The following example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes that you invest $10,000
in the Fund for the time periods indicated and then either redeem all of your
shares at the end of these periods or continue to hold them. The example also
assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same, and applies fee waivers and/or expense
reimbursements, if any, for the periods indicated above under “Annual Fund
Operating Expenses.” Although your actual expenses may be higher or lower, based
on these assumptions, your costs would be:
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Share
Status |
1
Year |
3
Years |
5
Years |
10
Years |
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Class
A |
Sold
or Held |
$723 |
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$1,033 |
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$1,366 |
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$2,304 |
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Class
C |
Sold |
$346 |
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$758 |
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$1,296 |
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$2,766 |
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Held |
$246 |
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$758 |
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$1,296 |
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$2,766 |
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Class
I |
Sold
or Held |
$103 |
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$360 |
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$637 |
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$1,427 |
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Class
Y |
Sold
or Held |
$113 |
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$374 |
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$655 |
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$1,457 |
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Class
Z |
Sold
or Held |
$93 |
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$346 |
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$619 |
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$1,397 |
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PORTFOLIO
TURNOVER
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate that the Fund pays
higher transaction costs and may result in higher taxes when Fund shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the
most recent fiscal year, the Fund’s portfolio turnover rate was 11% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
Under
normal conditions, the Fund invests at least 80% of its net assets in securities
of companies that are organized in, maintain at least 50% of their assets in, or
derive at least 50% of their revenues from, emerging market countries. The
Adviser has broad discretion to identify countries that it considers to qualify
as emerging markets. The Adviser selects emerging market countries that the Fund
will invest in based on the Adviser’s evaluation of economic fundamentals, legal
structure, political developments and other specific factors the Adviser
believes to be relevant.
Utilizing
qualitative and quantitative measures, the Adviser seeks to invest in
reasonably-priced companies that have strong structural growth potential. The
Adviser seeks attractive investment opportunities in all areas of emerging
markets, and utilizes a flexible investment approach across all market
capitalizations. The Adviser seeks to (i) integrate financially-material
environmental, social and governance (“ESG”) factors into the Fund’s investment
process and (ii) reduce material exposure to issuers that the Adviser deems
controversial in the ESG universe.
The
Fund’s holdings may include issues denominated in currencies of emerging market
countries, investment companies (like country funds) that invest in emerging
market countries, depositary receipts, and similar types of investments,
representing emerging market securities.
The
Fund may invest up to 20% of its net assets in securities issued by other
investment companies, including exchange-traded funds (“ETFs”). The Fund may
also invest in money market funds, but these investments are not subject to this
limitation. The Fund may invest in ETFs to participate in, or gain exposure to,
certain market sectors, or when direct investments in certain countries are not
permitted or available. The Fund may also invest in restricted securities,
including Rule 144A securities.
PRINCIPAL RISKS
There
is no assurance that the Fund will achieve its investment objective.
The Fund’s share price and return will fluctuate with
changes in the market value of the Fund’s portfolio securities. Accordingly, an
investment in the Fund involves the risk of losing
money.
Active
Management Risk.
In managing the Fund’s portfolio, the Adviser will apply investment techniques
and risk analyses in making investment decisions for the Fund, but there can be
no guarantee that these will produce the desired results. Investment decisions
made by the Adviser in seeking to achieve the Fund’s investment objective may
cause a decline in the value of the investments held by the Fund and, in turn,
cause the Fund’s shares to lose value or underperform other funds with similar
investment objectives.
Consumer Discretionary Sector
Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the consumer discretionary sector. The
consumer discretionary sector comprises companies whose
businesses are sensitive to economic cycles, such as manufacturers of high-end
apparel and automobile and leisure companies. Companies in
the consumer discretionary sector are subject to
fluctuations in supply and demand. These companies may also be adversely
affected by changes in consumer spending as a result of world events, political
and economic conditions, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.
Direct
Investments Risk.
Direct investments may involve a high degree of business and financial risk that
can result in substantial losses. Because of the absence of any public trading
market for these investments, the Fund may take longer to
liquidate
these positions than would be the case for publicly traded securities. Direct
investments are generally considered illiquid and will be aggregated with other
illiquid investments for purposes of the Fund's limitation on illiquid
investments.
Emerging
Market Issuers Risk.
Investments in securities of emerging market issuers involve risks not typically
associated with investments in securities of issuers in more developed countries
that may negatively affect the value of your investment in the Fund. Such
heightened risks may include, among others, expropriation and/or nationalization
of assets, restrictions on and government intervention in international trade,
confiscatory taxation, political instability, including authoritarian and/or
military involvement in governmental decision making, armed conflict, the impact
on the economy as a result of civil war, crime (including drug violence) and
social instability as a result of religious, ethnic and/or socioeconomic unrest.
Issuers in certain emerging market countries are subject to less stringent
requirements regarding accounting, auditing, financial reporting and record
keeping than are issuers in more developed markets, and therefore, all material
information may not be available or reliable. Emerging markets are also more
likely than developed markets to experience problems with the clearing and
settling of trades, as well as the holding of securities by local banks, agents
and depositories. Low trading volumes and volatile prices in less developed
markets may make trades harder to complete and settle, and governments or trade
groups may compel local agents to hold securities in designated depositories
that may not be subject to independent evaluation. Local agents are held only to
the standards of care of their local markets. In general, the less developed a
country’s securities markets are, the greater the likelihood of custody
problems. Additionally, each of the factors described below could have a
negative impact on the Fund’s performance and increase the volatility of the
Fund.
Securities
Markets. Securities
markets in emerging market countries are underdeveloped and are often considered
to be less correlated to global economic cycles than those markets located in
more developed countries. Securities markets in emerging market countries are
subject to greater risks associated with market volatility, lower market
capitalization, lower trading volume, illiquidity, inflation, greater price
fluctuations, uncertainty regarding the existence of trading markets,
governmental control and heavy regulation of labor and industry. These factors,
coupled with restrictions on foreign investment and other factors, limit the
supply of securities available for investment by the Fund. This will affect the
rate at which the Fund is able to invest in emerging market countries, the
purchase and sale prices for such securities and the timing of purchases and
sales. Emerging markets can experience high rates of inflation, deflation and
currency devaluation. The prices of certain securities listed on securities
markets in emerging market countries have been subject to sharp fluctuations and
sudden declines, and no assurance can be given as to the future performance of
listed securities in general. Volatility of prices may be greater than in more
developed securities markets. Moreover, securities markets in emerging market
countries may be closed for extended periods of time or trading on securities
markets may be suspended altogether due to political or civil unrest. Market
volatility may also be heightened by the actions of a small number of investors.
Brokerage firms in emerging market countries may be fewer in number and less
established than brokerage firms in more developed markets. Since the Fund may
need to effect securities transactions through these brokerage firms, the Fund
is subject to the risk that these brokerage firms will not be able to fulfill
their obligations to the Fund. This risk is magnified to the extent the Fund
effects securities transactions through a single brokerage firm or a small
number of brokerage firms. In addition, the infrastructure for the safe custody
of securities and for purchasing and selling securities, settling trades,
collecting dividends, initiating corporate actions, and following corporate
activity is not as well developed in emerging market countries as is the case in
certain more developed markets.
Political
and Economic Risk. Certain
emerging market countries have historically been subject to political
instability and their prospects are tied to the continuation of economic and
political liberalization in the region. Instability may result from factors such
as government or military intervention in decision making, terrorism, civil
unrest, extremism or hostilities between neighboring countries. Any of these
factors, including an outbreak of hostilities could negatively impact the Fund’s
returns. Limited political and democratic freedoms in emerging market countries
might cause significant social unrest. These factors may have a significant
adverse effect on an emerging market country’s economy.
Many
emerging market countries may be heavily dependent upon international trade and,
consequently, may continue to be negatively affected by trade barriers, exchange
controls, managed adjustments in relative currency values and other
protectionist measures imposed or negotiated by the countries with which it
trades. They also have been, and may continue to be, adversely affected by
economic conditions in the countries with which they trade.
In
addition, commodities (such as oil, gas and minerals) represent a significant
percentage of certain emerging market countries’ exports and these economies are
particularly sensitive to fluctuations in commodity prices. Adverse economic
events in one country may have a significant adverse effect on other countries
of this region. In addition, most emerging market countries have experienced, at
one time or another, severe and persistent levels of inflation, including, in
some cases, hyperinflation. This has, in turn, led to high interest rates,
extreme measures by governments to keep inflation in check, and a generally
debilitating effect on economic growth.
Although
inflation in many countries has lessened, there is no guarantee it will remain
at lower levels. The political history of certain emerging market countries has
been characterized by political uncertainty, intervention by the military in
civilian and economic spheres, and political corruption. Such events could
reverse favorable trends toward market and
economic
reform, privatization, and removal of trade barriers, and result in significant
disruption in securities markets in the region.
Also,
from time to time, certain issuers located in emerging market countries in which
the Fund invests may operate in, or have dealings with, countries subject to
sanctions and/or embargoes imposed by the U.S. Government and the United Nations
and/or countries identified by the U.S. Government as state sponsors of
terrorism. As a result, an issuer may sustain damage to its reputation if it is
identified as an issuer which operates in, or has dealings with, such countries.
The Fund, as an investor in such issuers, will be indirectly subject to those
risks.
The
economies of one or more countries in which the Fund may invest may be in
various states of transition from a planned economy to a more market oriented
economy. The economies of such countries differ from the economies of most
developed countries in many respects, including levels of government
involvement, states of development, growth rates, control of foreign exchange
and allocation of resources. Economic growth in these economies may be uneven
both geographically and among various sectors of their economies and may also be
accompanied by periods of high inflation. Political changes, social instability
and adverse diplomatic developments in these countries could result in the
imposition of additional government restrictions, including expropriation of
assets, confiscatory taxes or nationalization of some or all of the property
held by the underlying issuers of securities of emerging market issuers. There
is no guarantee that the governments of these countries will not revert back to
some form of planned or non-market oriented economy, and such governments
continue to be active participants in many economic sectors through ownership
positions and regulation. The allocation of resources in such countries is
subject to a high level of government control. Such countries’ governments may
strictly regulate the payment of foreign currency denominated obligations and
set monetary policy. Through their policies, these governments may provide
preferential treatment to particular industries or companies. The policies set
by the government of one of these countries could have a substantial effect on
that country’s economy.
Investment
and Repatriation Restrictions. The
government in an emerging market country may restrict or control to varying
degrees the ability of foreign investors to invest in securities of issuers
located or operating in such emerging market countries. These restrictions
and/or controls may at times limit or prevent foreign investment in securities
of issuers located or operating in emerging market countries and may inhibit the
Fund’s ability to meet its investment objective. In addition, the Fund may not
be able to buy or sell securities or receive full value for such securities.
Moreover, certain emerging market countries may require governmental approval or
special licenses prior to investments by foreign investors and may limit the
amount of investments by foreign investors in a particular industry and/or
issuer; may limit such foreign investment to a certain class of securities of an
issuer that may have less advantageous rights than the classes available for
purchase by domiciliaries of such emerging market countries; and/or may impose
additional taxes on foreign investors. A delay in obtaining a required
government approval or a license would delay investments in those emerging
market countries, and, as a result, the Fund may not be able to invest in
certain securities while approval is pending. The government of certain emerging
market countries may also withdraw or decline to renew a license that enables
the Fund to invest in such country. These factors make investing in issuers
located or operating in emerging market countries significantly riskier than
investing in issuers located or operating in more developed countries, and any
one of them could cause a decline in the net asset value of the
Fund.
Additionally,
investments in issuers located in certain emerging market countries may be
subject to a greater degree of risk associated with governmental approval in
connection with the repatriation of investment income, capital or the proceeds
of sales of securities by foreign investors. Moreover, there is the risk that if
the balance of payments in an emerging market country declines, the government
of such country may impose temporary restrictions on foreign capital
remittances. Consequently, the Fund could be adversely affected by delays in, or
a refusal to grant, required governmental approval for repatriation of capital,
as well as by the application to the Fund of any restrictions on investments.
Furthermore, investments in emerging market countries may require the Fund to
adopt special procedures, seek local government approvals or take other actions,
each of which may involve additional costs to the Fund.
Available
Disclosure About Emerging Market Issuers. Issuers
located or operating in emerging market countries are not subject to the same
rules and regulations as issuers located or operating in more developed
countries. Therefore, there may be less financial and other information publicly
available with regard to issuers located or operating in emerging market
countries and such issuers are not subject to the uniform accounting, auditing
and financial reporting standards applicable to issuers located or operating in
more developed countries.
Foreign
Currency Considerations. The
Fund’s assets that are invested in securities of issuers in emerging market
countries will generally be denominated in foreign currencies, and the proceeds
received by the Fund from these investments will be principally in foreign
currencies. The value of an emerging market country’s currency may be subject to
a high degree of fluctuation. This fluctuation may be due to changes in interest
rates, the effects of monetary policies issued by the United States, foreign
governments, central banks or supranational entities, the imposition of currency
controls or other national or global political or economic developments. The
economies of certain emerging market countries can be significantly affected by
currency devaluations. Certain emerging market countries may also have managed
currencies which are maintained at artificial levels relative to the U.S. dollar
rather than at levels determined by
the
market. This type of system can lead to sudden and large adjustments in the
currency which, in turn, can have a disruptive and negative effect on foreign
investors.
The
Fund’s exposure to an emerging market country’s currency and changes in value of
such foreign currencies versus the U.S. dollar may reduce the Fund’s investment
performance and the value of your investment in the Fund. Meanwhile, the Fund
will compute and expects to distribute its income in U.S. dollars, and the
computation of income will be made on the date that the income is earned by the
Fund at the foreign exchange rate in effect on that date. Therefore, if the
value of the respective emerging market country’s currency falls relative to the
U.S. dollar between the earning of the income and the time at which the Fund
converts the relevant emerging market country’s currency to U.S. dollars, the
Fund may be required to liquidate certain positions in order to make
distributions if the Fund has insufficient cash in U.S. dollars to meet
distribution requirements under the Internal Revenue Code. The liquidation of
investments, if required, could be at disadvantageous prices or otherwise have
an adverse impact on the Fund’s performance.
Certain
emerging market countries also restrict the free conversion of their currency
into foreign currencies, including the U.S. dollar. There is no significant
foreign exchange market for many such currencies and it would, as a result, be
difficult for the Fund to engage in foreign currency transactions designed to
protect the value of the Fund’s interests in securities denominated in such
currencies. Furthermore, if permitted, the Fund may incur costs in connection
with conversions between U.S. dollars and an emerging market country’s currency.
Foreign exchange dealers realize a profit based on the difference between the
prices at which they are buying and selling various currencies. Thus, a dealer
normally will offer to sell a foreign currency to the Fund at one rate, while
offering a lesser rate of exchange should the Fund desire immediately to resell
that currency to the dealer. The Fund will conduct its foreign currency exchange
transactions either on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange market,
or through entering into forward, futures or options contracts to purchase or
sell foreign currencies.
Operational
and Settlement Risk. In
addition to having less developed securities markets, emerging market countries
have less developed custody and settlement practices than certain developed
countries. Rules adopted under the Investment Company Act of 1940 permit the
Fund to maintain its foreign securities and cash in the custody of certain
eligible non-U.S. banks and securities depositories. Banks in emerging market
countries that are eligible foreign sub-custodians may be recently organized or
otherwise lack extensive operating experience. In addition, in certain emerging
market countries there may be legal restrictions or limitations on the ability
of the Fund to recover assets held in custody by a foreign sub-custodian in the
event of the bankruptcy of the sub-custodian. Because settlement systems in
emerging market countries may be less organized than in other developed markets,
there may be a risk that settlement may be delayed and that cash or securities
of the Fund may be in jeopardy because of failures of or defects in the systems.
Under the laws in many emerging market countries, the Fund may be required to
release local shares before receiving cash payment or may be required to make
cash payment prior to receiving local shares, creating a risk that the Fund may
surrender cash or securities without ever receiving securities or cash from the
other party. Settlement systems in emerging market countries also have a higher
risk of failed trades and back to back settlements may not be
possible.
The
Fund may not be able to convert a foreign currency to U.S. dollars in time for
the settlement of redemption requests. In the event that the Fund is not able to
convert the foreign currency to U.S. dollars in time for settlement, which may
occur as a result of the delays described above, the Fund may be required to
liquidate certain investments and/or borrow money in order to fund such
redemption. The liquidation of investments, if required, could be at
disadvantageous prices or otherwise have an adverse impact on the Fund’s
performance (e.g.,
by causing the Fund to overweight foreign currency denominated holdings and
underweight other holdings which were sold to fund redemptions). In addition,
the Fund will incur interest expense on any borrowings and the borrowings will
cause the Fund to be leveraged, which may magnify gains and losses on its
investments.
In
certain emerging market countries, the marketability of investments may be
limited due to the restricted opening hours of trading exchanges, and a
relatively high proportion of market value may be concentrated in the hands of a
relatively small number of investors. In addition, because certain emerging
market countries’ trading exchanges on which the Fund’s portfolio securities may
trade are open when the relevant exchanges are closed, the Fund may be subject
to heightened risk associated with market movements. Trading volume may be lower
on certain emerging market countries’ trading exchanges than on more developed
securities markets and securities may be generally less liquid. The
infrastructure for clearing, settlement and registration on the primary and
secondary markets of certain emerging market countries are less developed than
in certain other markets and under certain circumstances this may result in the
Fund experiencing delays in settling and/or registering transactions in the
markets in which it invests, particularly if the growth of foreign and domestic
investment in certain emerging market countries places an undue burden on such
investment infrastructure. Such delays could affect the speed with which the
Fund can transmit redemption proceeds and may inhibit the initiation and
realization of investment opportunities at optimum times.
Certain
issuers in emerging market countries may utilize share blocking schemes. Share
blocking refers to a practice, in certain foreign markets, where voting rights
related to an issuer’s securities are predicated on these securities being
blocked from trading at the custodian or sub-custodian level for a period of
time around a shareholder meeting. These
restrictions
have the effect of barring the purchase and sale of certain voting securities
within a specified number of days before and, in certain instances, after a
shareholder meeting where a vote of shareholders will be taken. Share blocking
may prevent the Fund from buying or selling securities for a period of time.
During the time that shares are blocked, trades in such securities will not
settle. The blocking period can last up to several weeks. The process for having
a blocking restriction lifted can be quite onerous with the particular
requirements varying widely by country. In addition, in certain countries, the
block cannot be removed. As a result of the ramifications of voting ballots in
markets that allow share blocking, the Adviser, on behalf of the Fund, reserves
the right to abstain from voting proxies in those markets.
Corporate
and Securities Laws. Securities
laws in emerging market countries are relatively new and unsettled and,
consequently, there is a risk of rapid and unpredictable change in laws
regarding foreign investment, securities regulation, title to securities and
securityholders rights. Accordingly, foreign investors may be adversely affected
by new or amended laws and regulations. In addition, the systems of corporate
governance to which emerging market issuers are subject may be less advanced
than those systems to which issuers located in more developed countries are
subject, and therefore, securityholders of issuers located in emerging market
countries may not receive many of the protections available to securityholders
of issuers located in more developed countries. In circumstances where adequate
laws and securityholders rights exist, it may not be possible to obtain swift
and equitable enforcement of the law. In addition, the enforcement of systems of
taxation at federal, regional and local levels in emerging market countries may
be inconsistent and subject to sudden change. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited.
ESG
Investing Strategy Risk.
The Fund’s ESG strategy could cause it to perform differently compared to funds
that do not have an ESG focus. The Fund’s ESG strategy may result in the Fund
investing in securities or industry sectors that underperform other securities
or underperform the market as a whole. The Fund is also subject to the risk that
the companies represented in the Fund do not operate as expected when addressing
ESG issues. Additionally, the valuation model used for identifying ESG companies
may not perform as intended, which may adversely affect an investment in the
Fund. Regulatory changes or interpretations regarding the definitions and/or use
of ESG criteria could have a material adverse effect on the Fund’s ability to
implement its ESG strategy.
Financials
Sector Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the financials sector. Companies in the financials
sector may be subject to extensive government regulation that affects the scope
of their activities, the prices they can charge and the amount of capital they
must maintain. The profitability of companies in the financials sector may be
adversely affected by increases in interest rates, by loan losses, which usually
increase in economic downturns, and by credit rating downgrades. In addition,
the financials sector is undergoing numerous changes, including continuing
consolidations, development of new products and structures and changes to its
regulatory framework. Furthermore, some companies in the financials sector
perceived as benefiting from government intervention in the past may be subject
to future government-imposed restrictions on their businesses or face increased
government involvement in their operations. Increased government involvement in
the financials sector, including measures such as taking ownership positions in
financial institutions, could result in a dilution of the Fund’s investments in
financial institutions.
Foreign Currency Risk.
The Fund’s exposure to foreign currencies and changes in the value of foreign
currencies versus the U.S. dollar may result in reduced returns for the Fund,
and the value of certain foreign currencies may be subject to a high degree of
fluctuation. The Fund may also incur costs in connection with conversions
between U.S. dollars and foreign currencies.
Foreign
Securities Risk. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments. Foreign market trading
hours, clearance and settlement procedures, and holiday schedules may limit the
Fund's ability to buy and sell securities.
Industrials
Sector Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the industrials sector. The industrials sector
comprises companies who produce capital goods used in construction and
manufacturing, such as companies that make and sell machinery, equipment and
supplies that are used to produce other goods. Companies in the industrials
sector may be adversely affected by changes in government regulation, world
events and economic conditions. In addition, companies in the industrials sector
be adversely affected by environmental damages, product liability claims and
exchange rates.
Information
Technology Sector Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the information technology sector. Information
technology companies face intense competition, both domestically and
internationally, which may have an adverse effect on profit margins. Information
technology companies may have limited product lines, markets, financial
resources or personnel. The products of information technology companies may
face product obsolescence due to rapid technological developments and frequent
new product introduction, unpredictable changes in
growth
rates and competition for the services of qualified personnel. Companies in the
information technology sector are heavily dependent on patent protection and the
expiration of patents may adversely affect the profitability of these
companies.
Market
Risk. The
prices of securities are subject to the risks associated with investing in the
securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Restricted
Securities Risk.
The Fund may hold securities that are restricted as to resale under the U.S.
Federal securities laws, such as securities in certain privately held companies.
Such securities may be highly illiquid and their values may experience
significant volatility. Restricted securities may be difficult to
value.
Risk
of Investing in Other Funds. The
Fund may invest in shares of other funds, including ETFs. As a result, the Fund
will indirectly be exposed to the risks of an investment in the underlying
funds. As a shareholder in a fund, the Fund would bear its ratable share of that
entity’s expenses. At the same time, the Fund would continue to pay its own
investment management fees and other expenses. As a result, the Fund and its
shareholders will be absorbing additional levels of fees with respect to
investments in other funds, including ETFs.
Small-
and Medium-Capitalization Companies Risk.
The Fund may invest in small- and medium-capitalization companies and, therefore
will be subject to certain risks associated with small- and medium-
capitalization companies. These companies are often subject to less analyst
coverage and may be in early and less predictable periods of their corporate
existences, with little or no record of profitability. In addition, these
companies often have greater price volatility, lower trading volume and less
liquidity than larger more established companies. These companies tend to have
smaller revenues, narrower product lines, less management depth and experience,
smaller shares of their product or service markets, fewer financial resources
and less competitive strength than large-capitalization companies. Returns on
investments in securities of small- and medium-capitalization companies could
trail the returns on investments in securities of larger companies.
Special
Purpose Acquisition Companies Risk.
Equity
securities in which the Fund invests include stock, rights, warrants, and other
interests in special purpose acquisition companies (“SPACs”) or similar special
purpose entities. A SPAC is typically a publicly traded company that raises
investment capital via an initial public offering for the purpose of acquiring
one or more existing companies (or interests therein) via merger, combination,
acquisition or other similar transactions. If the Fund purchases shares of a
SPAC in an initial public offering it will generally bear a sales commission,
which may be significant. The shares of a SPAC are often issued in “units” that
include one share of common stock and one right or warrant (or partial right or
warrant) conveying the right to purchase additional shares or partial shares. In
some cases, the rights and warrants may be separated from the common stock at
the election of the holder, after which they may become freely tradeable. After
going public and until a transaction is completed, a SPAC generally invests the
proceeds of its initial public offering (less a portion retained to cover
expenses) in U.S. Government securities, money market securities and cash. To
the extent the SPAC is invested in cash or similar securities, this may impact
the Fund’s ability to meet its investment objective. If a SPAC does not complete
a transaction within a specified period of time after going public, the SPAC is
typically dissolved, at which point the invested funds are returned to the
SPAC’s shareholders (less certain permitted expenses) and any rights or warrants
issued by the SPAC expire worthless. SPACs generally provide their investors
with the option of redeeming an investment in the SPAC at or around the time of
effecting a transaction. In some cases, the Fund may forfeit its right to
receive additional warrants or other interests in the SPAC if it redeems its
interest in the SPAC in connection with a transaction. Because SPACs often do
not have an operating history or ongoing business other than seeking a
transaction, the value of their securities may be particularly dependent on the
quality of its management and on the ability of the SPAC’s management to
identify and complete a profitable transaction. Some SPACs may pursue
transactions only within certain industries or regions, which may increase the
volatility of an investment in them. In addition, the securities issued by a
SPAC, which may be traded in the over-the-counter market, may become illiquid
and/or may be subject to restrictions on resale. Other risks of investing in
SPACs include that a significant portion of the monies raised by the SPAC may be
expended during the search for a target transaction; an attractive transaction
may not be identified at all (or any requisite approvals may not be obtained)
and the SPAC may be required to return any remaining monies to shareholders; a
transaction once identified or effected may prove unsuccessful and an investment
in the SPAC may lose value; the warrants or other rights with respect to the
SPAC held by the Fund may expire worthless or may be repurchased or retired by
the SPAC at an unfavorable price; and an investment in a SPAC may be diluted by
additional later offerings of interests in the SPAC or by other investors
exercising existing rights to purchase shares of the SPAC.
Special
Risk Considerations of Investing in Chinese Issuers. Investments
in securities of Chinese issuers, including issuers outside of China, involve
certain risks and considerations not typically associated with investments in
U.S securities. These risks
include
among others (i) more frequent (and potentially widespread) trading suspensions
and government interventions with respect to Chinese issuers resulting in a lack
of liquidity and in price volatility, (ii) currency revaluations and other
currency exchange rate fluctuations or blockage, (iii) the nature and extent of
intervention by the Chinese government in the Chinese securities markets,
whether such intervention will continue and the impact of such intervention or
its discontinuation, (iv) the risk of nationalization or expropriation of
assets, (v) the risk that the Chinese government may decide not to continue to
support economic reform programs, (vi) limitations on the use of brokers, (vii)
higher rates of inflation, (viii) greater political, economic and social
uncertainty, (ix) market volatility caused by any potential regional or
territorial conflicts or natural or other disasters, and (x) the risk of
increased trade tariffs, embargoes, sanctions investment restrictions and other
trade limitations. Certain securities are, or may in the future become
restricted, and the Fund may be forced to sell such securities and incur a loss
as a result. In addition, the economy of China differs, often unfavorably, from
the U.S. economy in such respects as structure, general development, government
involvement, wealth distribution, rate of inflation, growth rate, interest
rates, allocation of resources and capital reinvestment, among others. The
Chinese central government has historically exercised substantial control over
virtually every sector of the Chinese economy through administrative regulation
and/or state ownership and actions of the Chinese central and local government
authorities continue to have a substantial effect on economic conditions in
China. In addition, the Chinese government has from time to time taken actions
that influence the prices at which certain goods may be sold, encourage
companies to invest or concentrate in particular industries, induce mergers
between companies in certain industries and induce private companies to publicly
offer their securities to increase or continue the rate of economic growth,
control the rate of inflation or otherwise regulate economic expansion. The
Chinese government may do so in the future as well, potentially having a
significant adverse effect on economic conditions in China.
Special
Risk Considerations of Investing in Indian Issuers.
Investments in securities of Indian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. Such heightened risks include, among others, greater government control
over the economy, including the risk that the Indian government may decide not
to continue to support economic reform programs, political and legal
uncertainty, competition from low-cost issuers of other emerging economies in
Asia, currency fluctuations or blockage of foreign currency exchanges and the
risk of nationalization or expropriation of assets. Issuers in India are subject
to less stringent requirements regarding accounting, auditing, financial
reporting and record keeping than are issuers in more developed markets, and
therefore, all material information may not be available or reliable. India is
also located in a part of the world that has historically been prone to natural
disasters, such as earthquakes and tsunamis. Any such natural disaster could
cause a significant impact on the Indian economy and could impact operations of
the Subsidiary, causing an adverse impact on the Fund. In addition, religious
and border disputes persist in India. Moreover, India has experienced civil
unrest and hostilities with neighboring countries, including Pakistan, and the
Indian government has confronted separatist movements in several Indian states.
India has experienced acts of terrorism that has targeted foreigners. Such acts
of terrorism have had a negative impact on tourism, an important sector of the
Indian economy.
The
securities market of India is considered an emerging market characterized by a
small number of listed companies with significantly smaller market
capitalizations, greater price volatility and substantially less liquidity than
developed markets, such as the United States. These factors, coupled with
restrictions on foreign investment and other factors, limit the supply of
securities available for investment by the Fund. This will affect the rate at
which the Fund is able to invest in India, the purchase and sale prices for such
securities and the timing of purchases and sales. Emerging markets can
experience high rates of inflation, deflation and currency devaluation. Certain
restrictions on foreign investment may decrease the liquidity of the Fund’s
portfolio or inhibit the Fund’s ability to pursue its investment objective. In
addition, the Reserve Bank of India, the Indian counterpart of the Federal
Reserve Bank in the United States, imposes certain limits on the foreign
ownership of Indian securities. These restrictions and/or controls may at times
limit or prevent foreign investment in securities of issuers located or
operating in India and may inhibit the Fund’s ability to pursue its investment
objective.
Special
Risk Considerations of Investing in Latin American Issuers.
Investments in securities of Latin American issuers involve special
considerations not typically associated with investments in securities of
issuers located in the United States. The economies of certain Latin American
countries have, at times, experienced high interest rates, economic volatility,
inflation, currency devaluations and high unemployment rates. In addition,
commodities (such as oil, gas and minerals) represent a significant percentage
of the region’s exports and many economies in this region are particularly
sensitive to fluctuations in commodity prices. Adverse economic events in one
country may have a significant adverse effect on other countries of this
region.
Most
Latin American countries have experienced severe and persistent levels of
inflation, including, in some cases, hyperinflation. This has, in turn, led to
high interest rates, extreme measures by governments to keep inflation in check,
and a generally debilitating effect on economic growth. Although inflation in
many Latin American countries has lessened, there is no guarantee it will remain
at lower levels.
The
political history of certain Latin American countries has been characterized by
political uncertainty, intervention by the military in civilian and economic
spheres, and political corruption. Such events could reverse favorable trends
toward market and economic reform, privatization, and removal of trade barriers,
and could result in significant disruption in securities markets in the
region.
The
economies of Latin American countries are generally considered emerging markets
and can be significantly affected by currency devaluations. Certain Latin
American countries may also have managed currencies which are maintained at
artificial levels relative to the U.S. dollar rather than at levels determined
by the market. This type of system can lead to sudden and large adjustments in
the currency which, in turn, can have a disruptive and negative effect on
foreign investors. Certain Latin American countries also restrict the free
conversion of their currency into foreign currencies, including the U.S. dollar.
There is no significant foreign exchange market for many Latin American
currencies and it would, as a result, be difficult for the Fund to engage in
foreign currency transactions designed to protect the value of the Fund’s
interests in securities denominated in such currencies.
Finally,
a number of Latin American countries are among the largest debtors of developing
countries. There have been moratoria on, and a rescheduling of, repayment with
respect to these debts. Such events can restrict the flexibility of these debtor
nations in the international markets and result in the imposition of onerous
conditions on their economies.
Stock
Connect Risk.
The Fund may invest in A-shares listed and traded on the Shanghai Stock Exchange
and the Shenzhen Stock Exchange through Stock Connect, or on such other stock
exchanges that participate in Stock Connect from time to time or in the future.
Trading through Stock Connect is subject to a number of restrictions that may
affect the Fund’s investments and returns. For example, trading through Stock
Connect is subject to daily quotas that limit the maximum daily net purchases on
any particular day, which may restrict or preclude the Fund’s ability to invest
in Stock Connect A-shares. In addition, investments made through Stock Connect
are subject to trading, clearance and settlement procedures that are relatively
untested in the PRC, which could pose risks to the Fund. Furthermore, securities
purchased via Stock Connect will be held via a book entry omnibus account in the
name of HKSCC, Hong Kong’s clearing entity, at the CSDCC. The Fund’s ownership
interest in Stock Connect securities will not be reflected directly in book
entry with CSDCC and will instead only be reflected on the books of its Hong
Kong sub-custodian. The Fund may therefore depend on HKSCC’s ability or
willingness as record-holder of Stock Connect securities to enforce the Fund’s
shareholder rights. PRC law did not historically recognize the concept of
beneficial ownership; while PRC regulations and the Hong Kong Stock Exchange
have issued clarifications and guidance supporting the concept of beneficial
ownership via Stock Connect, the interpretation of beneficial ownership in the
PRC by regulators and courts may continue to evolve. Moreover, Stock Connect
A-shares generally may not be sold, purchased or otherwise transferred other
than through Stock Connect in accordance with applicable rules.
A
primary feature of Stock Connect is the application of the home market’s laws
and rules applicable to investors in A-shares. Therefore, the Fund’s investments
in Stock Connect A-shares are generally subject to PRC securities regulations
and listing rules, among other restrictions. The Fund will not benefit from
access to Hong Kong investor compensation funds, which are set up to protect
against defaults of trades, when investing through Stock Connect. Stock Connect
is only available on days when markets in both the PRC and Hong Kong are open,
which may limit the Fund’s ability to trade when it would be otherwise
attractive to do so. Since the inception of Stock Connect, foreign investors
(including the Fund) investing in A-shares through Stock Connect have been
temporarily exempt from the PRC corporate income tax and value-added tax on the
gains on disposal of such A-shares. Dividends are subject to PRC corporate
income tax on a withholding basis at 10%, unless reduced under a double tax
treaty with China upon application to and obtaining approval from the competent
tax authority. Aside from these temporary measures, uncertainties in permanent
PRC tax rules governing taxation of income and gains from investments in Stock
Connect A-shares could result in unexpected tax liabilities for the
Fund.
The
Stock Connect program is a relatively new program and may be subject to further
interpretation and guidance. There can be no assurance as to the program’s
continued existence or whether future developments regarding the program may
restrict or adversely affect the Fund’s investments or returns. In addition, the
application and interpretation of the laws and regulations of Hong Kong and the
PRC, and the rules, policies or guidelines published or applied by relevant
regulators and exchanges in respect of the Stock Connect program are uncertain,
and they may have a detrimental effect on the Fund’s investments and
returns.
PERFORMANCE
The following
chart and table provide some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual total returns compare with those of a broad measure of
market performance. For instance, the MSCI Emerging Markets
Investable Markets Index is an all market capitalization index that is designed
to measure equity market performance of emerging markets countries.
The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. The annual returns in the bar chart
are for the Fund’s Class A shares and do not reflect sales loads. If sales loads
were reflected, returns would be lower than those
shown.
Additionally, large purchases and/or
redemptions of shares of a class, relative to the amount of assets represented
by the class, may cause the annual returns for each class to differ. Updated
performance information for the Fund is available on the VanEck website at
vaneck.com.
CLASS A: Annual Total Returns (%) as of
12/31
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Best
Quarter: |
+25.07% |
2Q
2020 |
Worst
Quarter: |
-25.90% |
1Q
2020 |
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Average Annual Total Returns as of
12/31/2022 |
1
Year |
5
Years |
10
Years |
Life
of Class |
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|
Class
A Shares
(12/20/93) |
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|
Before Taxes |
-29.53% |
-6.46% |
0.27% |
— |
|
|
After
Taxes on Distributions1 |
-30.02% |
-6.98% |
-0.01% |
— |
|
|
After Taxes on Distributions and Sale
of Fund Shares |
-16.91% |
-4.61% |
0.31% |
— |
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|
Class
C Shares
(10/3/03) |
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|
Before Taxes |
-26.54% |
-6.09% |
0.04% |
— |
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Class
I Shares
(12/31/07) |
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Before Taxes |
-24.81% |
-4.88% |
1.36% |
— |
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Class
Y Shares
(4/30/10) |
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Before Taxes |
-24.87% |
-4.97% |
1.23% |
— |
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Class
Z Shares
(9/16/19) |
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|
Before Taxes |
-24.73% |
— |
— |
-5.32% |
|
|
MSCI
Emerging Markets Investable Markets Index
(reflects no deduction for
fees, expenses or taxes except withholding
taxes) |
-19.83% |
-1.10% |
1.64% |
— |
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1 After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
These returns are shown for
one class of shares only; after-tax returns for the other classes may
vary. Actual after-tax returns depend on your individual tax
situation and may differ from those shown in the preceding table. The after-tax return
information shown above does not apply to Fund shares held through a
tax-advantaged account, such as a 401(k) plan or Investment Retirement
Account.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation
Portfolio
Managers.
David
Semple has been Portfolio Manager of the Fund since 2002. Ola El-Shawarby has
been Deputy Portfolio Manager since May 2023. Ms. El-Shawarby has worked at the
Adviser as a Senior Analyst since 2017. Angus Shillington has been Deputy
Portfolio Manager of the Fund since 2014. Mr. Shillington has worked at the
Adviser as a Senior Analyst since 2009.
PURCHASE
AND SALE OF FUND SHARES
In
general, shares of the Fund may be purchased or redeemed on any business day,
primarily through financial representatives such as brokers or advisers, or
directly by eligible investors through the Fund’s transfer agent. Purchase
minimums for Classes A, C and Y shares are $1,000 for an initial purchase and
$100 for a subsequent purchase, with no purchase minimums for any purchase
through a retirement or pension plan account, for any “wrap fee” account and
similar programs offered without a sales charge by certain financial
institutions and third-party recordkeepers and/or administrators, and for any
account using the Automatic Investment Plan, or for any other periodic purchase
program. Class Z shares have no initial or subsequent purchase minimums,
although financial intermediaries may have their own minimums. Purchase minimums
for Class I shares are $1 million for an initial purchase and no minimum for a
subsequent purchase; the initial minimum may be reduced or waived at the
Adviser’s discretion.
TAX
INFORMATION
The
Fund normally distributes net investment income and net realized capital gains,
if any, to shareholders annually. These distributions are generally taxable to
you as ordinary income or capital gains, unless you are investing through a tax
advantaged retirement account, such as a 401(k) plan or an individual retirement
account (IRA), in which case your distributions may be taxed as ordinary income
when withdrawn from such account.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a bank), the Fund and/or its affiliates may pay the intermediary for
the sale of Fund shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your financial professional to recommend the Fund over another investment. Ask
your financial professional or visit your financial intermediary’s website for
more information.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
The Emerging Markets Leaders
Fund seeks long-term capital appreciation by investing primarily in equity
securities in emerging markets around the world.
FUND FEES AND EXPENSES
This
table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the tables and examples
below.
You may qualify for Class A sales charge
discounts if you and your family (includes spouse and children under age 21)
invest, or agree to invest in the future, at least $25,000, in the aggregate, in Classes A
and C of the VanEck Funds. More information about these and
other discounts is available from your financial professional and in the
“Shareholder Information-Sales Charges” section of this prospectus, in the
“Availability of Discounts” section of the Fund’s Statement of Additional
Information (“SAI”) and, with respect to purchases of shares through specific
intermediaries, in Appendix A to this prospectus, entitled “Intermediary Sales
Charge Discounts and Waivers”. Investors
may pay commissions and/or other forms of compensation to an intermediary, such
as a broker, for transactions in Class Z shares, which are not reflected in the
table or the example below.
Shareholder
Fees
(fees paid directly from your
investment)
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Class
A |
Class
I |
Class
Y |
Class
Z |
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Maximum
Sales Charge (load) imposed on purchases (as a percentage of offering
price) |
5.75% |
0.00% |
0.00% |
0.00% |
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Maximum
Deferred Sales Charge (load) (as a percentage of the lesser of the net
asset value or purchase price) |
0.00%¹ |
0.00% |
0.00% |
0.00% |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Class
A |
Class
I |
Class
Y |
Class
Z |
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Management
Fees |
0.75% |
0.75% |
0.75% |
0.75% |
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Distribution
and/or Service (12b-1) Fees |
0.25% |
0.00% |
0.00% |
0.00% |
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Other
Expenses2 |
5.18% |
3.80% |
3.80% |
5.17% |
|
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Total
Annual Fund Operating Expenses |
6.18% |
4.55% |
4.55% |
5.92% |
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Fee
Waivers and/or Expense Reimbursements3 |
-4.70% |
-3.67% |
-3.57% |
-5.14% |
|
|
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursements |
1.48% |
0.88% |
0.98% |
0.78% |
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1
A contingent deferred
sales charge for Class A shares of 1.00% for one year applies to redemptions of
qualified commissionable shares purchased at or above the $1 million breakpoint
level.
2
“Other Expenses” are based
on estimated amounts for the current fiscal
year.
3
Van Eck Associates
Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to
the extent necessary to prevent the operating expenses of the Fund (excluding
acquired fund fees and expenses, interest expense, trading expenses, dividends
and interest payments on securities sold short, taxes and extraordinary
expenses) from exceeding 1.45% for Class A, 0.85% for Class I, 0.95% for Class
Y, and 0.75% for Class Z of the Fund’s average daily net assets per year until
May 1,
2024. During such time, the expense limitation is expected to
continue until the Board of Trustees acts to discontinue all or a portion of
such expense limitation.
EXPENSE EXAMPLE
The following example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes that you invest $10,000
in the Fund for the time periods indicated and then either redeem all of your
shares at the end of these periods or continue to hold them. The example also
assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same, and applies fee waivers and/or expense
reimbursements, if any, for the periods indicated above under “Annual Fund
Operating Expenses.” Although your actual expenses may be higher or lower, based
on these assumptions, your costs would be:
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Share
Status |
1
Year |
3
Years |
5
Years |
10
years |
|
|
|
|
Class
A |
Sold or
Held |
$717 |
|
$1,909 |
|
$3,072 |
|
$5,864 |
|
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|
|
Class
I |
Sold
or Held |
$90 |
|
$1,042 |
|
$2,002 |
|
$4,441 |
|
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|
Class
Y |
Sold
or Held |
$100 |
|
$1,051 |
|
$2,010 |
|
$4,447 |
|
|
|
|
|
Class
Z |
Sold
or Held |
$80 |
|
$1,302 |
|
$2,503 |
|
$5,408 |
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PORTFOLIO
TURNOVER
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate that the Fund pays
higher transaction costs and may result in higher taxes when Fund shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the
period from March 1, 2022 (the Fund’s commencement of operations) through
December 31, 2022, the Fund’s portfolio turnover rate was 19% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
Under
normal conditions, the Fund invests at least 80% of its net assets in equity
securities of companies that are organized in, maintain at least 50% of their
assets in, or derive at least 50% of their revenues from, emerging market
countries. The Adviser has broad discretion to identify countries that it
considers to qualify as emerging markets. The Adviser selects emerging market
countries that the Fund will invest in based on the Adviser’s evaluation of
economic fundamentals, legal structure, political developments and other
specific factors the Adviser believes to be relevant. The Fund is considered to
be “non-diversified” which means that it may invest a larger portion of its
assets in a single issuer.
Utilizing
qualitative and quantitative measures, the Adviser seeks to invest in
reasonably-priced companies that have strong structural growth potential. The
Adviser seeks attractive investment opportunities in all areas of emerging
markets, and utilizes a flexible investment approach across medium and large
market capitalizations. The Adviser seeks to (i) integrate financially-material
environmental, social and governance (“ESG”) factors into the Fund’s investment
process and (ii) reduce material exposure to issuers that the Adviser deems
controversial in the ESG universe.
The
Fund’s holdings may include issues denominated in currencies of emerging market
countries, investment companies (like country funds) that invest in emerging
market countries, and depositary receipts, and similar types of investments,
representing emerging market securities. The Fund may enter into foreign
currency transactions to attempt to moderate the effect of currency
fluctuations. The Fund may also invest in special purpose acquisition companies
(SPACs).
The
Fund may invest up to 20% of its net assets in securities issued by other
investment companies, including exchange-traded funds (“ETFs”). The Fund may
also invest in money market funds, but these investments are not subject to this
limitation. The Fund may invest in ETFs to participate in, or gain exposure to,
certain market sectors, or when direct investments in certain countries are not
permitted or available. The Fund may also invest in restricted securities,
including Rule 144A securities.
PRINCIPAL RISKS
There
is no assurance that the Fund will achieve its investment objective.
The Fund’s share price and return will fluctuate with
changes in the market value of the Fund’s portfolio securities. Accordingly, an
investment in the Fund involves the risk of losing
money.
Active
Management Risk.
In managing the Fund’s portfolio, the Adviser will apply investment techniques
and risk analyses in making investment decisions for the Fund, but there can be
no guarantee that these will produce the desired results. Investment decisions
made by the Adviser in seeking to achieve the Fund’s investment objective may
cause a decline in the value of the investments held by the Fund and, in turn,
cause the Fund’s shares to lose value or underperform other funds with similar
investment objectives.
Consumer Discretionary Sector
Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the consumer discretionary sector. The
consumer discretionary sector comprises companies whose
businesses are sensitive to economic cycles, such as manufacturers of high-end
apparel and automobile and leisure companies. Companies in
the consumer discretionary sector are subject to
fluctuations in supply and demand. These companies may also be adversely
affected by changes in consumer spending as a result of world events, political
and economic conditions, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.
Depositary Receipts
Risk. The
Fund may invest in depositary receipts (including American Depositary Receipts),
which involve similar risks to those associated with investments in foreign
securities. Depositary receipts are receipts listed on U.S. or foreign exchanges
issued by banks or trust companies that entitle the holder to all dividends and
capital gains that are paid out on the underlying foreign shares. The issuers of
certain depositary receipts are under no obligation to distribute shareholder
communications
to the holders of such receipts, or to pass through to them any voting rights
with respect to the deposited securities. Investments in depositary receipts may
be less liquid than the underlying shares in their primary trading market. The
issuers of depositary receipts may discontinue issuing new depositary receipts
and withdraw existing depositary receipts at any time, which may result in costs
and delays in the distribution of the underlying assets to the Fund and may
negatively impact the Fund’s performance.
Direct
Investments Risk.
Direct investments may involve a high degree of business and financial risk that
can result in substantial losses. Because of the absence of any public trading
market for these investments, the Fund may take longer to liquidate these
positions than would be the case for publicly traded securities. Direct
investments are generally considered illiquid and will be aggregated with other
illiquid investments for purposes of the Fund's limitation on illiquid
investments.
Emerging
Market Issuers Risk.
Investments in securities of emerging market issuers involve risks not typically
associated with investments in securities of issuers in more developed countries
that may negatively affect the value of your investment in the Fund. Such
heightened risks may include, among others, expropriation and/or nationalization
of assets, restrictions on and government intervention in international trade,
confiscatory taxation, political instability, including authoritarian and/or
military involvement in governmental decision making, armed conflict, the impact
on the economy as a result of civil war, crime (including drug violence) and
social instability as a result of religious, ethnic and/or socioeconomic unrest.
Issuers in certain emerging market countries are subject to less stringent
requirements regarding accounting, auditing, financial reporting and record
keeping than are issuers in more developed markets, and therefore, all material
information may not be available or reliable. Emerging markets are also more
likely than developed markets to experience problems with the clearing and
settling of trades, as well as the holding of securities by local banks, agents
and depositories. Low trading volumes and volatile prices in less developed
markets may make trades harder to complete and settle, and governments or trade
groups may compel local agents to hold securities in designated depositories
that may not be subject to independent evaluation. Local agents are held only to
the standards of care of their local markets. In general, the less developed a
country’s securities markets are, the greater the likelihood of custody
problems. Additionally, each of the factors described below could have a
negative impact on the Fund’s performance and increase the volatility of the
Fund.
Securities
Markets. Securities
markets in emerging market countries are underdeveloped and are often considered
to be less correlated to global economic cycles than those markets located in
more developed countries. Securities markets in emerging market countries are
subject to greater risks associated with market volatility, lower market
capitalization, lower trading volume, illiquidity, inflation, greater price
fluctuations, uncertainty regarding the existence of trading markets,
governmental control and heavy regulation of labor and industry. These factors,
coupled with restrictions on foreign investment and other factors, limit the
supply of securities available for investment by the Fund. This will affect the
rate at which the Fund is able to invest in emerging market countries, the
purchase and sale prices for such securities and the timing of purchases and
sales. Emerging markets can experience high rates of inflation, deflation and
currency devaluation. The prices of certain securities listed on securities
markets in emerging market countries have been subject to sharp fluctuations and
sudden declines, and no assurance can be given as to the future performance of
listed securities in general. Volatility of prices may be greater than in more
developed securities markets. Moreover, securities markets in emerging market
countries may be closed for extended periods of time or trading on securities
markets may be suspended altogether due to political or civil unrest. Market
volatility may also be heightened by the actions of a small number of investors.
Brokerage firms in emerging market countries may be fewer in number and less
established than brokerage firms in more developed markets. Since the Fund may
need to effect securities transactions through these brokerage firms, the Fund
is subject to the risk that these brokerage firms will not be able to fulfill
their obligations to the Fund. This risk is magnified to the extent the Fund
effects securities transactions through a single brokerage firm or a small
number of brokerage firms. In addition, the infrastructure for the safe custody
of securities and for purchasing and selling securities, settling trades,
collecting dividends, initiating corporate actions, and following corporate
activity is not as well developed in emerging market countries as is the case in
certain more developed markets.
Political
and Economic Risk. Certain
emerging market countries have historically been subject to political
instability and their prospects are tied to the continuation of economic and
political liberalization in the region. Instability may result from factors such
as government or military intervention in decision making, terrorism, civil
unrest, extremism or hostilities between neighboring countries. Any of these
factors, including an outbreak of hostilities could negatively impact the Fund’s
returns. Limited political and democratic freedoms in emerging market countries
might cause significant social unrest. These factors may have a significant
adverse effect on an emerging market country’s economy.
Many
emerging market countries may be heavily dependent upon international trade and,
consequently, may continue to be negatively affected by trade barriers, exchange
controls, managed adjustments in relative currency values and other
protectionist measures imposed or negotiated by the countries with which it
trades. They also have been, and may continue to be, adversely affected by
economic conditions in the countries with which they trade.
In
addition, commodities (such as oil, gas and minerals) represent a significant
percentage of certain emerging market countries’ exports and these economies are
particularly sensitive to fluctuations in commodity prices. Adverse economic
events in one country may have a significant adverse effect on other countries
of this region. In addition, most emerging market countries have experienced, at
one time or another, severe and persistent levels of inflation, including, in
some
cases,
hyperinflation. This has, in turn, led to high interest rates, extreme measures
by governments to keep inflation in check, and a generally debilitating effect
on economic growth.
Although
inflation in many countries has lessened, there is no guarantee it will remain
at lower levels. The political history of certain emerging market countries has
been characterized by political uncertainty, intervention by the military in
civilian and economic spheres, and political corruption. Such events could
reverse favorable trends toward market and economic reform, privatization, and
removal of trade barriers, and result in significant disruption in securities
markets in the region.
Also,
from time to time, certain issuers located in emerging market countries in which
the Fund invests may operate in, or have dealings with, countries subject to
sanctions and/or embargoes imposed by the U.S. Government and the United Nations
and/or countries identified by the U.S. Government as state sponsors of
terrorism. As a result, an issuer may sustain damage to its reputation if it is
identified as an issuer which operates in, or has dealings with, such countries.
The Fund, as an investor in such issuers, will be indirectly subject to those
risks.
The
economies of one or more countries in which the Fund may invest may be in
various states of transition from a planned economy to a more market oriented
economy. The economies of such countries differ from the economies of most
developed countries in many respects, including levels of government
involvement, states of development, growth rates, control of foreign exchange
and allocation of resources. Economic growth in these economies may be uneven
both geographically and among various sectors of their economies and may also be
accompanied by periods of high inflation. Political changes, social instability
and adverse diplomatic developments in these countries could result in the
imposition of additional government restrictions, including expropriation of
assets, confiscatory taxes or nationalization of some or all of the property
held by the underlying issuers of securities of emerging market issuers. There
is no guarantee that the governments of these countries will not revert back to
some form of planned or non-market oriented economy, and such governments
continue to be active participants in many economic sectors through ownership
positions and regulation. The allocation of resources in such countries is
subject to a high level of government control. Such countries’ governments may
strictly regulate the payment of foreign currency denominated obligations and
set monetary policy. Through their policies, these governments may provide
preferential treatment to particular industries or companies. The policies set
by the government of one of these countries could have a substantial effect on
that country’s economy.
Investment
and Repatriation Restrictions. The
government in an emerging market country may restrict or control to varying
degrees the ability of foreign investors to invest in securities of issuers
located or operating in such emerging market countries. These restrictions
and/or controls may at times limit or prevent foreign investment in securities
of issuers located or operating in emerging market countries and may inhibit the
Fund’s ability to meet its investment objective. In addition, the Fund may not
be able to buy or sell securities or receive full value for such securities.
Moreover, certain emerging market countries may require governmental approval or
special licenses prior to investments by foreign investors and may limit the
amount of investments by foreign investors in a particular industry and/or
issuer; may limit such foreign investment to a certain class of securities of an
issuer that may have less advantageous rights than the classes available for
purchase by domiciliaries of such emerging market countries; and/or may impose
additional taxes on foreign investors. A delay in obtaining a required
government approval or a license would delay investments in those emerging
market countries, and, as a result, the Fund may not be able to invest in
certain securities while approval is pending. The government of certain emerging
market countries may also withdraw or decline to renew a license that enables
the Fund to invest in such country. These factors make investing in issuers
located or operating in emerging market countries significantly riskier than
investing in issuers located or operating in more developed countries, and any
one of them could cause a decline in the net asset value of the
Fund.
Additionally,
investments in issuers located in certain emerging market countries may be
subject to a greater degree of risk associated with governmental approval in
connection with the repatriation of investment income, capital or the proceeds
of sales of securities by foreign investors. Moreover, there is the risk that if
the balance of payments in an emerging market country declines, the government
of such country may impose temporary restrictions on foreign capital
remittances. Consequently, the Fund could be adversely affected by delays in, or
a refusal to grant, required governmental approval for repatriation of capital,
as well as by the application to the Fund of any restrictions on investments.
Furthermore, investments in emerging market countries may require the Fund to
adopt special procedures, seek local government approvals or take other actions,
each of which may involve additional costs to the Fund.
Available
Disclosure About Emerging Market Issuers. Issuers
located or operating in emerging market countries are not subject to the same
rules and regulations as issuers located or operating in more developed
countries. Therefore, there may be less financial and other information publicly
available with regard to issuers located or operating in emerging market
countries and such issuers are not subject to the uniform accounting, auditing
and financial reporting standards applicable to issuers located or operating in
more developed countries.
Foreign
Currency Considerations. The
Fund’s assets that are invested in securities of issuers in emerging market
countries will generally be denominated in foreign currencies, and the proceeds
received by the Fund from these investments will be principally in foreign
currencies. The value of an emerging market country’s currency may be subject
to
a high degree of fluctuation. This fluctuation may be due to changes in interest
rates, the effects of monetary policies issued by the United States, foreign
governments, central banks or supranational entities, the imposition of currency
controls or other national or global political or economic developments. The
economies of certain emerging market countries can be significantly affected by
currency devaluations. Certain emerging market countries may also have managed
currencies which are maintained at artificial levels relative to the U.S. dollar
rather than at levels determined by the market. This type of system can lead to
sudden and large adjustments in the currency which, in turn, can have a
disruptive and negative effect on foreign investors.
The
Fund’s exposure to an emerging market country’s currency and changes in value of
such foreign currencies versus the U.S. dollar may reduce the Fund’s investment
performance and the value of your investment in the Fund. Meanwhile, the Fund
will compute and expects to distribute its income in U.S. dollars, and the
computation of income will be made on the date that the income is earned by the
Fund at the foreign exchange rate in effect on that date. Therefore, if the
value of the respective emerging market country’s currency falls relative to the
U.S. dollar between the earning of the income and the time at which the Fund
converts the relevant emerging market country’s currency to U.S. dollars, the
Fund may be required to liquidate certain positions in order to make
distributions if the Fund has insufficient cash in U.S. dollars to meet
distribution requirements under the Internal Revenue Code. The liquidation of
investments, if required, could be at disadvantageous prices or otherwise have
an adverse impact on the Fund’s performance.
Certain
emerging market countries also restrict the free conversion of their currency
into foreign currencies, including the U.S. dollar. There is no significant
foreign exchange market for many such currencies and it would, as a result, be
difficult for the Fund to engage in foreign currency transactions designed to
protect the value of the Fund’s interests in securities denominated in such
currencies. Furthermore, if permitted, the Fund may incur costs in connection
with conversions between U.S. dollars and an emerging market country’s currency.
Foreign exchange dealers realize a profit based on the difference between the
prices at which they are buying and selling various currencies. Thus, a dealer
normally will offer to sell a foreign currency to the Fund at one rate, while
offering a lesser rate of exchange should the Fund desire immediately to resell
that currency to the dealer. The Fund will conduct its foreign currency exchange
transactions either on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange market,
or through entering into forward, futures or options contracts to purchase or
sell foreign currencies.
Operational
and Settlement Risk. In
addition to having less developed securities markets, emerging market countries
have less developed custody and settlement practices than certain developed
countries. Rules adopted under the Investment Company Act of 1940 permit the
Fund to maintain its foreign securities and cash in the custody of certain
eligible non-U.S. banks and securities depositories. Banks in emerging market
countries that are eligible foreign sub-custodians may be recently organized or
otherwise lack extensive operating experience. In addition, in certain emerging
market countries there may be legal restrictions or limitations on the ability
of the Fund to recover assets held in custody by a foreign sub-custodian in the
event of the bankruptcy of the sub-custodian. Because settlement systems in
emerging market countries may be less organized than in other developed markets,
there may be a risk that settlement may be delayed and that cash or securities
of the Fund may be in jeopardy because of failures of or defects in the systems.
Under the laws in many emerging market countries, the Fund may be required to
release local shares before receiving cash payment or may be required to make
cash payment prior to receiving local shares, creating a risk that the Fund may
surrender cash or securities without ever receiving securities or cash from the
other party. Settlement systems in emerging market countries also have a higher
risk of failed trades and back to back settlements may not be
possible.
The
Fund may not be able to convert a foreign currency to U.S. dollars in time for
the settlement of redemption requests. In the event that the Fund is not able to
convert the foreign currency to U.S. dollars in time for settlement, which may
occur as a result of the delays described above, the Fund may be required to
liquidate certain investments and/or borrow money in order to fund such
redemption. The liquidation of investments, if required, could be at
disadvantageous prices or otherwise have an adverse impact on the Fund’s
performance (e.g.,
by causing the Fund to overweight foreign currency denominated holdings and
underweight other holdings which were sold to fund redemptions). In addition,
the Fund will incur interest expense on any borrowings and the borrowings will
cause the Fund to be leveraged, which may magnify gains and losses on its
investments.
In
certain emerging market countries, the marketability of investments may be
limited due to the restricted opening hours of trading exchanges, and a
relatively high proportion of market value may be concentrated in the hands of a
relatively small number of investors. In addition, because certain emerging
market countries’ trading exchanges on which the Fund’s portfolio securities may
trade are open when the relevant exchanges are closed, the Fund may be subject
to heightened risk associated with market movements. Trading volume may be lower
on certain emerging market countries’ trading exchanges than on more developed
securities markets and securities may be generally less liquid. The
infrastructure for clearing, settlement and registration on the primary and
secondary markets of certain emerging market countries are less developed than
in certain other markets and under certain circumstances this may result in the
Fund experiencing delays in settling and/or registering transactions in the
markets in which it invests, particularly if the growth of foreign and domestic
investment in certain emerging market countries places an undue burden on such
investment
infrastructure.
Such delays could affect the speed with which the Fund can transmit redemption
proceeds and may inhibit the initiation and realization of investment
opportunities at optimum times.
Certain
issuers in emerging market countries may utilize share blocking schemes. Share
blocking refers to a practice, in certain foreign markets, where voting rights
related to an issuer’s securities are predicated on these securities being
blocked from trading at the custodian or sub-custodian level for a period of
time around a shareholder meeting. These restrictions have the effect of barring
the purchase and sale of certain voting securities within a specified number of
days before and, in certain instances, after a shareholder meeting where a vote
of shareholders will be taken. Share blocking may prevent the Fund from buying
or selling securities for a period of time. During the time that shares are
blocked, trades in such securities will not settle. The blocking period can last
up to several weeks. The process for having a blocking restriction lifted can be
quite onerous with the particular requirements varying widely by country. In
addition, in certain countries, the block cannot be removed. As a result of the
ramifications of voting ballots in markets that allow share blocking, the
Adviser, on behalf of the Fund, reserves the right to abstain from voting
proxies in those markets.
Corporate
and Securities Laws. Securities
laws in emerging market countries are relatively new and unsettled and,
consequently, there is a risk of rapid and unpredictable change in laws
regarding foreign investment, securities regulation, title to securities and
securityholders rights. Accordingly, foreign investors may be adversely affected
by new or amended laws and regulations. In addition, the systems of corporate
governance to which emerging market issuers are subject may be less advanced
than those systems to which issuers located in more developed countries are
subject, and therefore, securityholders of issuers located in emerging market
countries may not receive many of the protections available to securityholders
of issuers located in more developed countries. In circumstances where adequate
laws and securityholders rights exist, it may not be possible to obtain swift
and equitable enforcement of the law. In addition, the enforcement of systems of
taxation at federal, regional and local levels in emerging market countries may
be inconsistent and subject to sudden change. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited.
Equity Securities Risk.
The
value of the equity securities held by the Fund may fall due to general market
and economic conditions, perceptions regarding the markets in which the issuers
of securities held by the Fund participate, or factors relating to specific
issuers in which the Fund invests. Equity securities are subordinated to
preferred securities and debt in a company’s capital structure with respect to
priority to a share of corporate income, and therefore will be subject to
greater dividend risk than preferred securities or debt instruments. In
addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns.
ESG
Investing Strategy Risk.
The Fund’s ESG strategy could cause it to perform differently compared to funds
that do not have an ESG focus. The Fund’s ESG strategy may result in the Fund
investing in securities or industry sectors that underperform other securities
or underperform the market as a whole. The Fund is also subject to the risk that
the companies represented in the Fund do not operate as expected when addressing
ESG issues. Additionally, the valuation model used for identifying ESG companies
may not perform as intended, which may adversely affect an investment in the
Fund. Regulatory changes or interpretations regarding the definitions and/or use
of ESG criteria could have a material adverse effect on the Fund’s ability to
implement its ESG strategy.
Financials
Sector Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the financials sector. Companies in the financials
sector may be subject to extensive government regulation that affects the scope
of their activities, the prices they can charge and the amount of capital they
must maintain. The profitability of companies in the financials sector may be
adversely affected by increases in interest rates, by loan losses, which usually
increase in economic downturns, and by credit rating downgrades. In addition,
the financials sector is undergoing numerous changes, including continuing
consolidations, development of new products and structures and changes to its
regulatory framework. Furthermore, some companies in the financials sector
perceived as benefiting from government intervention in the past may be subject
to future government-imposed restrictions on their businesses or face increased
government involvement in their operations. Increased government involvement in
the financials sector, including measures such as taking ownership positions in
financial institutions, could result in a dilution of the Fund’s investments in
financial institutions.
Foreign Currency Risk.
The Fund’s exposure to foreign currencies and changes in the value of foreign
currencies versus the U.S. dollar may result in reduced returns for the Fund,
and the value of certain foreign currencies may be subject to a high degree of
fluctuation. The Fund may also incur costs in connection with conversions
between U.S. dollars and foreign currencies.
Foreign
Securities Risk. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments.
Foreign
market trading hours, clearance and settlement procedures, and holiday schedules
may limit the Fund's ability to buy and sell securities.
Industrials
Sector Risk.The
Fund may be sensitive to, and its performance may depend to a greater extent on,
the overall condition of the industrials sector. The industrials sector
comprises companies who produce capital goods used in construction and
manufacturing, such as companies that make and sell machinery, equipment and
supplies that are used to produce other goods. Companies in the industrials
sector may be adversely affected by changes in government regulation, world
events and economic conditions. In addition, companies in the industrials sector
be adversely affected by environmental damages, product liability claims and
exchange rates.
Information
Technology Sector Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the information technology sector. Information
technology companies face intense competition, both domestically and
internationally, which may have an adverse effect on profit margins. Information
technology companies may have limited product lines, markets, financial
resources or personnel. The products of information technology companies may
face product obsolescence due to rapid technological developments and frequent
new product introduction, unpredictable changes in growth rates and competition
for the services of qualified personnel. Companies in the information technology
sector are heavily dependent on patent protection and the expiration of patents
may adversely affect the profitability of these companies.
Large-Capitalization
Companies Risk.
Securities
of large-capitalization companies (generally companies with market
capitalization greater than $10 billion) could fall out of favor with the market
and underperform securities of small- or medium-capitalization companies.
Larger, more established companies may be slow to respond to challenges and may
grow more slowly than smaller companies.
Market
Risk.
The prices of securities are subject to the risks associated with investing in
the securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Medium-Capitalization
Companies Risk.
Medium-capitalization
companies may be more volatile and more likely than large-capitalization
companies to have narrower product lines, fewer financial resources, less
management depth and experience and less competitive strength. In addition,
these companies often have greater price volatility, lower trading volume and
less liquidity than larger more established companies. Returns on investments in
securities of medium-capitalization companies could trail the returns on
investments in securities of large-capitalization companies.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the Investment Company Act of 1940. The Fund is subject to the risk
that it will be more volatile than a diversified fund because the Fund may
invest a relatively high percentage of its assets in a smaller number of issuers
or may invest a larger proportion of its assets in a single issuer. Moreover,
the gains and losses on a single investment may have a greater impact on the
Fund’s net asset value and may make the Fund more volatile than more diversified
funds. The Fund may be particularly vulnerable to this risk if it is comprised
of a limited number of investments.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Restricted
Securities Risk.
The Fund may hold securities that are restricted as to resale under the U.S.
Federal securities laws, such as securities in certain privately held companies.
Such securities may be highly illiquid and their values may experience
significant volatility. Restricted securities may be difficult to
value.
Risk
of Investing in Other Funds.
The Fund may invest in shares of other funds, including ETFs. As a result, the
Fund will indirectly be exposed to the risks of an investment in the underlying
funds. As a shareholder in a fund, the Fund would bear its ratable share of that
entity’s expenses. At the same time, the Fund would continue to pay its own
investment management fees and other expenses. As a result, the Fund and its
shareholders will be absorbing additional levels of fees with respect to
investments in other funds, including ETFs.
Special
Purpose Acquisition Companies Risk.
Equity
securities in which the Fund invests include stock, rights, warrants, and other
interests in special purpose acquisition companies (“SPACs”) or similar special
purpose entities. A SPAC is typically a publicly traded company that raises
investment capital via an initial public offering for the purpose of acquiring
one or more existing companies (or interests therein) via merger, combination,
acquisition or other similar transactions. If the Fund purchases shares of a
SPAC in an initial public offering it will generally bear a sales commission,
which may be significant. The shares of a SPAC are often issued in “units” that
include one share of common stock and one right or warrant (or partial right or
warrant) conveying the right to purchase additional shares or partial shares. In
some cases, the rights and warrants may be separated from the common stock at
the election of the holder, after which they may become freely tradeable. After
going public and until a transaction is
completed,
a SPAC generally invests the proceeds of its initial public offering (less a
portion retained to cover expenses) in U.S. Government securities, money market
securities and cash. To the extent the SPAC is invested in cash or similar
securities, this may impact the Fund’s ability to meet its investment objective.
If a SPAC does not complete a transaction within a specified period of time
after going public, the SPAC is typically dissolved, at which point the invested
funds are returned to the SPAC’s shareholders (less certain permitted expenses)
and any rights or warrants issued by the SPAC expire worthless. SPACs generally
provide their investors with the option of redeeming an investment in the SPAC
at or around the time of effecting a transaction. In some cases, the Fund may
forfeit its right to receive additional warrants or other interests in the SPAC
if it redeems its interest in the SPAC in connection with a transaction. Because
SPACs often do not have an operating history or ongoing business other than
seeking a transaction, the value of their securities may be particularly
dependent on the quality of its management and on the ability of the SPAC’s
management to identify and complete a profitable transaction. Some SPACs may
pursue transactions only within certain industries or regions, which may
increase the volatility of an investment in them. In addition, the securities
issued by a SPAC, which may be traded in the over-the-counter market, may become
illiquid and/or may be subject to restrictions on resale. Other risks of
investing in SPACs include that a significant portion of the monies raised by
the SPAC may be expended during the search for a target transaction; an
attractive transaction may not be identified at all (or any requisite approvals
may not be obtained) and the SPAC may be required to return any remaining monies
to shareholders; a transaction once identified or effected may prove
unsuccessful and an investment in the SPAC may lose value; the warrants or other
rights with respect to the SPAC held by the Fund may expire worthless or may be
repurchased or retired by the SPAC at an unfavorable price; and an investment in
a SPAC may be diluted by additional later offerings of interests in the SPAC or
by other investors exercising existing rights to purchase shares of the
SPAC.
Special
Risk Considerations of Investing in Chinese Issuers.
Investments in securities of Chinese issuers, including issuers outside of
China, involve certain risks and considerations not typically associated with
investments in U.S securities. These risks include among others (i) more
frequent (and potentially widespread) trading suspensions and government
interventions with respect to Chinese issuers resulting in a lack of liquidity
and in price volatility, (ii) currency revaluations and other currency exchange
rate fluctuations or blockage, (iii) the nature and extent of intervention by
the Chinese government in the Chinese securities markets, whether such
intervention will continue and the impact of such intervention or its
discontinuation, (iv) the risk of nationalization or expropriation of assets,
(v) the risk that the Chinese government may decide not to continue to support
economic reform programs, (vi) limitations on the use of brokers, (vii) higher
rates of inflation, (viii) greater political, economic and social uncertainty,
(ix) market volatility caused by any potential regional or territorial conflicts
or natural or other disasters, and (x) the risk of increased trade tariffs,
embargoes, sanctions investment restrictions and other trade limitations.
Certain securities are, or may in the future become restricted, and the Fund may
be forced to sell such securities and incur a loss as a result. In addition, the
economy of China differs, often unfavorably, from the U.S. economy in such
respects as structure, general development, government involvement, wealth
distribution, rate of inflation, growth rate, interest rates, allocation of
resources and capital reinvestment, among others. The Chinese central government
has historically exercised substantial control over virtually every sector of
the Chinese economy through administrative regulation and/or state ownership and
actions of the Chinese central and local government authorities continue to have
a substantial effect on economic conditions in China. In addition, the Chinese
government has from time to time taken actions that influence the prices at
which certain goods may be sold, encourage companies to invest or concentrate in
particular industries, induce mergers between companies in certain industries
and induce private companies to publicly offer their securities to increase or
continue the rate of economic growth, control the rate of inflation or otherwise
regulate economic expansion. The Chinese government may do so in the future as
well, potentially having a significant adverse effect on economic conditions in
China.
Special
Risk Considerations of Investing in Indian Issuers.
Investments in securities of Indian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. Such heightened risks include, among others, greater government control
over the economy, including the risk that the Indian government may decide not
to continue to support economic reform programs, political and legal
uncertainty, competition from low-cost issuers of other emerging economies in
Asia, currency fluctuations or blockage of foreign currency exchanges and the
risk of nationalization or expropriation of assets. Issuers in India are subject
to less stringent requirements regarding accounting, auditing, financial
reporting and record keeping than are issuers in more developed markets, and
therefore, all material information may not be available or reliable. India is
also located in a part of the world that has historically been prone to natural
disasters, such as earthquakes and tsunamis. Any such natural disaster could
cause a significant impact on the Indian economy and could impact operations of
the Subsidiary, causing an adverse impact on the Fund. In addition, religious
and border disputes persist in India. Moreover, India has experienced civil
unrest and hostilities with neighboring countries, including Pakistan, and the
Indian government has confronted separatist movements in several Indian states.
India has experienced acts of terrorism that has targeted foreigners. Such acts
of terrorism have had a negative impact on tourism, an important sector of the
Indian economy.
The
securities market of India is considered an emerging market characterized by a
small number of listed companies with significantly smaller market
capitalizations, greater price volatility and substantially less liquidity than
developed markets, such as the United States. These factors, coupled with
restrictions on foreign investment and other factors, limit the supply of
securities available for investment by the Fund. This will affect the rate at
which the Fund is able to invest in India, the purchase and sale prices for such
securities and the timing of purchases and sales. Emerging markets can
experience high rates of inflation, deflation and currency devaluation. Certain
restrictions on foreign investment may decrease the liquidity of the Fund’s
portfolio or inhibit the
Fund’s
ability to pursue its investment objective. In addition, the Reserve Bank of
India, the Indian counterpart of the Federal Reserve Bank in the United States,
imposes certain limits on the foreign ownership of Indian securities. These
restrictions and/or controls may at times limit or prevent foreign investment in
securities of issuers located or operating in India and may inhibit the Fund’s
ability to pursue its investment objective.
Stock
Connect Risk.
The Fund may invest in A-shares listed and traded on the Shanghai Stock Exchange
and the Shenzhen Stock Exchange through Stock Connect, or on such other stock
exchanges that participate in Stock Connect from time to time or in the future.
Trading through Stock Connect is subject to a number of restrictions that may
affect the Fund’s investments and returns. For example, trading through Stock
Connect is subject to daily quotas that limit the maximum daily net purchases on
any particular day, which may restrict or preclude the Fund’s ability to invest
in Stock Connect A-shares. In addition, investments made through Stock Connect
are subject to trading, clearance and settlement procedures that are relatively
untested in the PRC, which could pose risks to the Fund. Furthermore, securities
purchased via Stock Connect will be held via a book entry omnibus account in the
name of HKSCC, Hong Kong’s clearing entity, at the CSDCC. The Fund’s ownership
interest in Stock Connect securities will not be reflected directly in book
entry with CSDCC and will instead only be reflected on the books of its Hong
Kong sub-custodian. The Fund may therefore depend on HKSCC’s ability or
willingness as record-holder of Stock Connect securities to enforce the Fund’s
shareholder rights. PRC law did not historically recognize the concept of
beneficial ownership; while PRC regulations and the Hong Kong Stock Exchange
have issued clarifications and guidance supporting the concept of beneficial
ownership via Stock Connect, the interpretation of beneficial ownership in the
PRC by regulators and courts may continue to evolve. Moreover, Stock Connect
A-shares generally may not be sold, purchased or otherwise transferred other
than through Stock Connect in accordance with applicable rules.
A
primary feature of Stock Connect is the application of the home market’s laws
and rules applicable to investors in A-shares. Therefore, the Fund’s investments
in Stock Connect A-shares are generally subject to PRC securities regulations
and listing rules, among other restrictions. The Fund will not benefit from
access to Hong Kong investor compensation funds, which are set up to protect
against defaults of trades, when investing through Stock Connect. Stock Connect
is only available on days when markets in both the PRC and Hong Kong are open,
which may limit the Fund’s ability to trade when it would be otherwise
attractive to do so. Since the inception of Stock Connect, foreign investors
(including the Fund) investing in A-shares through Stock Connect have been
temporarily exempt from the PRC corporate income tax and value-added tax on the
gains on disposal of such A-shares. Dividends are subject to PRC corporate
income tax on a withholding basis at 10%, unless reduced under a double tax
treaty with China upon application to and obtaining approval from the competent
tax authority. Aside from these temporary measures, uncertainties in permanent
PRC tax rules governing taxation of income and gains from investments in Stock
Connect A-shares could result in unexpected tax liabilities for the
Fund.
The
Stock Connect program is a relatively new program and may be subject to further
interpretation and guidance. There can be no assurance as to the program’s
continued existence or whether future developments regarding the program may
restrict or adversely affect the Fund’s investments or returns. In addition, the
application and interpretation of the laws and regulations of Hong Kong and the
PRC, and the rules, policies or guidelines published or applied by relevant
regulators and exchanges in respect of the Stock Connect program are uncertain,
and they may have a detrimental effect on the Fund’s investments and
returns.
PERFORMANCE
The Fund commenced
operations on March 1, 2022. Accordingly, the Fund does not have a full
calendar year of performance.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation
Portfolio
Managers.
David
Semple has been Portfolio Manager of the Fund since inception. Mr. Semple has
worked at the Adviser since 1998. Ola El-Shawarby has been Deputy Portfolio
Manager since May 2023. Ms. El-Shawarby has worked at the Adviser as a Senior
Analyst since 2017. Angus Shillington has been Deputy Portfolio Manager of the
Fund since inception. Mr. Shillington has worked at the Adviser since 2009.
PURCHASE
AND SALE OF FUND SHARES
In
general, shares of the Fund may be purchased or redeemed on any business day,
primarily through financial representatives such as brokers or advisers, or
directly by eligible investors through the Fund’s transfer agent. Purchase
minimums for Classes A and Y shares are $1,000 for an initial purchase and $100
for a subsequent purchase, with no purchase minimums for any purchase through a
retirement or pension plan account, for any “wrap fee” account and similar
programs offered without a sales charge by certain financial institutions and
third-party recordkeepers and/or administrators, and for any account using the
Automatic Investment Plan, or for any other periodic purchase program. Class Z
shares have no initial or subsequent purchase minimums, although financial
intermediaries may have their own minimums. Purchase minimums for Class I shares
are $1 million for an initial purchase and no minimum for a subsequent purchase;
the initial minimum may be reduced or waived at the Adviser’s
discretion.
TAX
INFORMATION
The
Fund normally distributes net investment income and net realized capital gains,
if any, to shareholders annually. These distributions are generally taxable to
you as ordinary income or capital gains, unless you are investing through a tax
advantaged retirement account, such as a 401(k) plan or an individual retirement
account (IRA), in which case your distributions may be taxed as ordinary income
when withdrawn from such account.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a bank), the Fund and/or its affiliates may pay the intermediary for
the sale of Fund shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your financial professional to recommend the Fund over another investment. Ask
your financial professional or visit your financial intermediary’s website for
more information.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
The Environmental
Sustainability Fund seeks long-term capital appreciation by investing primarily
in equity securities of companies operating in environmental sustainability
markets.
FUND FEES AND EXPENSES
This
table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund. You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples below.
You may qualify for Class A
sales charge discounts if you and your family (includes spouse and children
under age 21) invest, or agree to invest in the future, at least
$25,000, in the aggregate, in Classes A and C of
the VanEck Funds. More information about these and other
discounts is available from your financial professional and in the “Shareholder
Information-Sales Charges” section of this prospectus, in the “Availability of
Discounts” section of the Fund’s Statement of Additional Information (“SAI”)
and, with respect to purchases of shares through specific intermediaries, in
Appendix A to this prospectus, entitled “Intermediary Sales Charge Discounts and
Waivers”.
Shareholder
Fees (fees
paid directly from your investment)
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Class
A |
Class
I |
Class
Y |
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Maximum
Sales Charge (load) imposed on purchases (as a percentage of offering
price) |
5.75% |
0.00% |
0.00% |
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Maximum
Deferred Sales Charge (load) (as a percentage of the lesser of the net
asset value or purchase price) |
0.00%¹ |
0.00% |
0.00% |
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Annual
Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Class
A |
Class
I |
Class
Y |
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Management
Fees |
0.75% |
0.75% |
0.75% |
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Distribution
and/or Service (12b-1) Fees |
0.25% |
0.00% |
0.00% |
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Other
Expenses |
4.79% |
3.54% |
3.67% |
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Total
Annual Fund Operating Expenses |
5.79% |
4.29% |
4.42% |
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Fee
Waivers and/or Expense Reimbursements2 |
-4.54% |
-3.34% |
-3.37% |
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Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursements |
1.25% |
0.95% |
1.05% |
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1
A contingent deferred
sales charge for Class A shares of 1.00% for one year applies to redemptions of
qualified commissionable shares purchased at or above the $1 million breakpoint
level.
2
Van Eck Associates
Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to
the extent necessary to prevent the operating expenses of the Fund (excluding
acquired fund fees and expenses, interest expense, trading expenses, dividends
and interest payments on securities sold short, taxes and extraordinary
expenses) from exceeding 1.25% for Class A, 0.95% for Class I, and 1.05% for
Class Y of the Fund’s average daily net assets per year until May 1,
2024. During such time, the expense limitation is expected to
continue until the Board of Trustees acts to discontinue all or a portion of
such expense limitation.
EXPENSE EXAMPLE
The following example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes that you invest $10,000
in the Fund for the time periods indicated and then either redeem all of your
shares at the end of these periods or continue to hold them. The example also
assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same, and applies fee waivers and/or expense
reimbursements, if any, for the periods indicated above under “Annual Fund
Operating Expense.” Although your actual expenses may be higher or lower, based
on these assumptions, your costs would be:
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Share
Status |
1
Year |
3
Years |
5
Years |
10
Years |
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Class
A |
Sold or
Held |
$695 |
$1,818 |
$2,924 |
$5,613 |
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Class
I |
Sold
or Held |
$97 |
$996 |
$1,908 |
$4,245 |
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Class
Y |
Sold
or Held |
$107 |
$1,031 |
$1,966 |
$4,352 |
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PORTFOLIO
TURNOVER
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate that the Fund pays
higher transaction costs and may result in higher taxes when Fund shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the
most recent fiscal year, the Fund’s portfolio turnover rate was 14% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
Under normal conditions, the Fund
invests at least 80% of its net assets in securities of companies operating in
environmental sustainability markets. Environmental
sustainability markets encompass industries and companies aligned with
environmentally-focused aspirations, as outlined, at this time, by the
objectives set forth by a subset of the United Nations’ Sustainable Development
Goals. These may include industries such as renewable energy (solar, wind,
geothermal, hydroelectric), smart resource management (energy efficiency,
manufacturing), agriculture technology, recycling, water and advanced materials
(electrification of transport, battery technologies). The Adviser may identify
other industries that it considers to qualify as relating to environmental
sustainability markets.
The
Fund may invest without limitation in any environmental sustainability related
industries and may have no exposure to one or more particular environmental
sustainability related industries at any given time. Within the eligible
universe of companies, the Fund’s investment management team considers a variety
of impact metrics intended to gauge and measure the sustainability contribution
of such companies. Utilizing qualitative and quantitative measures, the Fund’s
investment management team selects equity securities of companies that it
believes represent value opportunities and/or that have growth potential.
Candidates for the Fund’s portfolio are evaluated based on their relative
desirability using a wide range of criteria, including a company’s commitment to
environmental issues such as climate, land, air, and water.
The
Fund’s investment management team selects securities using a fundamental stock
analysis in which they assess, among other factors, an issuer’s financial
statements and growth projections relative to the market value as well as the
quality of company operations and management leadership. A sustainability
assessment is concurrently conducted by the investment management team with the
understanding that the quality of a company’s environmental footprint and impact
is intrinsically tied to how such company runs its operations.
The
Fund may invest in securities of companies located anywhere in the world,
including the U.S. and may invest in depositary receipts. Under ordinary
circumstances, the Fund will invest in securities of issuers from a number of
different countries, and may invest any amount of its assets in emerging
markets. The Fund may invest in securities of companies of any capitalization
range. The Fund may also invest in special purpose acquisition companies
(SPACs). The Fund is considered to be “non-diversified,” which means that it may
invest a larger portion of its assets in a single issuer.
The
Fund may use derivative instruments, such as structured notes, warrants,
currency forwards, futures contracts, options and swap agreements, to gain or
hedge exposure to environmental sustainability sectors or companies. The Fund’s
screening methodology for securities of companies operating in environmental
sustainability markets is applied to underlying investments rather than to the
derivatives instruments themselves. The Fund may enter into foreign currency
transactions to attempt to moderate the effect of currency fluctuations. The
Fund may write covered call options on portfolio securities to the extent that
the value of all securities with respect to which covered calls are written does
not exceed 10% of the Fund’s net asset value.
The
Fund may also invest up to 20% of its net assets in securities issued by other
investment companies, including exchange- traded funds (“ETFs”). The Fund may
also invest in money market funds, but these investments are not subject to this
limitation. The Fund may invest in ETFs to participate in, or gain exposure to,
certain market sectors, or when direct investments in certain countries are not
permitted or available.
PRINCIPAL RISKS
There
is no assurance that the Fund will achieve its investment objective.
The Fund’s share price and return will fluctuate with
changes in the market value of the Fund’s portfolio securities. Accordingly, an
investment in the Fund involves the risk of losing
money.
Active
Management Risk.
In managing the Fund’s portfolio, the Adviser will apply investment techniques
and risk analyses in making investment decisions for the Fund, but there can be
no guarantee that these will produce the desired results. Investment
decisions
made by the Adviser in seeking to achieve the Fund’s investment objective may
cause a decline in the value of the investments held by the Fund and, in turn,
cause the Fund’s shares to lose value or underperform other funds with similar
investment objectives.
Derivatives
Risk.
Derivatives
and other similar instruments (referred to collectively as “derivatives”) are
financial instruments whose values are based on the value of one or more
reference assets or indicators, such as a security, currency, interest rate, or
index. The Fund’s use of derivatives involves risks different from, and possibly
greater than, the risks associated with investing directly in securities and
other more traditional investments. Moreover, although the value of a derivative
is based on an underlying asset or indicator, a derivative typically does not
carry the same rights as would be the case if the Fund invested directly in the
underlying securities, currencies or other assets.
Derivatives
are subject to a number of risks, such as potential changes in value in response
to market developments or, in the case of “over-the-counter” derivatives, as a
result of a counterparty’s credit quality and the risk that a derivative
transaction may not have the effect the Adviser anticipated. Derivatives also
involve the risk of mispricing or improper valuation and the risk that changes
in the value of a derivative may not achieve the desired correlation with the
underlying asset or indicator. Derivative transactions can create investment
leverage and may be highly volatile, and the Fund could lose more than the
amount it invests. The use of derivatives may increase the amount and affect the
timing and character of taxes payable by shareholders of the Fund.
Many
derivative transactions are entered into “over-the-counter” without a central
clearinghouse; as a result, the value of such a derivative transaction will
depend on, among other factors, the ability and the willingness of the Fund’s
counterparty to perform its obligations under the transaction. If a counterparty
were to default on its obligations, the Fund’s contractual remedies against such
counterparty may be subject to bankruptcy and insolvency laws, which could
affect the Fund’s rights as a creditor (e.g.,
the Fund may not receive the net amount of payments that it is contractually
entitled to receive). Counterparty risk also refers to the related risks of
having concentrated exposure to such a counterparty. A liquid secondary market
may not always exist for the Fund’s derivative positions at any time, and the
Fund may not be able to initiate or liquidate a swap position at an advantageous
time or price, which may result in significant losses. The Fund may also face
the risk that it may not be able to meet margin and payment requirements and
maintain a derivatives position.
Derivatives
are also subject to operational and legal risks. Operational risk generally
refers to risk related to potential operational issues, including documentation
issues, settlement issues, system failures, inadequate controls, and human
errors. Legal risk generally refers to insufficient documentation, insufficient
capacity or authority of counterparty, or legality or enforceability of a
contract.
Emerging
Market Issuers Risk.
Investments in securities of emerging market issuers involve risks not typically
associated with investments in securities of issuers in more developed countries
that may negatively affect the value of your investment in the Fund. Such
heightened risks may include, among others, expropriation and/or nationalization
of assets, restrictions on and government intervention in international trade,
confiscatory taxation, political instability, including authoritarian and/or
military involvement in governmental decision making, armed conflict, the impact
on the economy as a result of civil war, crime (including drug violence) and
social instability as a result of religious, ethnic and/or socioeconomic unrest.
Issuers in certain emerging market countries are subject to less stringent
requirements regarding accounting, auditing, financial reporting and record
keeping than are issuers in more developed markets, and therefore, all material
information may not be available or reliable. Emerging markets are also more
likely than developed markets to experience problems with the clearing and
settling of trades, as well as the holding of securities by local banks, agents
and depositories. Low trading volumes and volatile prices in less developed
markets may make trades harder to complete and settle, and governments or trade
groups may compel local agents to hold securities in designated depositories
that may not be subject to independent evaluation. Local agents are held only to
the standards of care of their local markets. In general, the less developed a
country’s securities markets are, the greater the likelihood of custody
problems. Additionally, each of the factors described below could have a
negative impact on the Fund’s performance and increase the volatility of the
Fund.
Securities
Markets. Securities
markets in emerging market countries are underdeveloped and are often considered
to be less correlated to global economic cycles than those markets located in
more developed countries. Securities markets in emerging market countries are
subject to greater risks associated with market volatility, lower market
capitalization, lower trading volume, illiquidity, inflation, greater price
fluctuations, uncertainty regarding the existence of trading markets,
governmental control and heavy regulation of labor and industry. These factors,
coupled with restrictions on foreign investment and other factors, limit the
supply of securities available for investment by the Fund. This will affect the
rate at which the Fund is able to invest in emerging market countries, the
purchase and sale prices for such securities and the timing of purchases and
sales. Emerging markets can experience high rates of inflation, deflation and
currency devaluation. The prices of certain securities listed on securities
markets in emerging market countries have been subject to sharp fluctuations and
sudden declines, and no assurance can be given as to the future performance of
listed securities in general. Volatility of prices may be greater than in more
developed securities markets. Moreover, securities markets in emerging market
countries may be closed for extended periods of time or trading on securities
markets may be suspended altogether due to political or civil unrest. Market
volatility may also be heightened by the actions of a small number of investors.
Brokerage firms in emerging market countries may be fewer in number and less
established than brokerage firms in more developed markets. Since the Fund may
need to effect securities transactions through these
brokerage
firms, the Fund is subject to the risk that these brokerage firms will not be
able to fulfill their obligations to the Fund. This risk is magnified to the
extent the Fund effects securities transactions through a single brokerage firm
or a small number of brokerage firms. In addition, the infrastructure for the
safe custody of securities and for purchasing and selling securities, settling
trades, collecting dividends, initiating corporate actions, and following
corporate activity is not as well developed in emerging market countries as is
the case in certain more developed markets.
Political
and Economic Risk. Certain
emerging market countries have historically been subject to political
instability and their prospects are tied to the continuation of economic and
political liberalization in the region. Instability may result from factors such
as government or military intervention in decision making, terrorism, civil
unrest, extremism or hostilities between neighboring countries. Any of these
factors, including an outbreak of hostilities could negatively impact the Fund’s
returns. Limited political and democratic freedoms in emerging market countries
might cause significant social unrest. These factors may have a significant
adverse effect on an emerging market country’s economy.
Many
emerging market countries may be heavily dependent upon international trade and,
consequently, may continue to be negatively affected by trade barriers, exchange
controls, managed adjustments in relative currency values and other
protectionist measures imposed or negotiated by the countries with which it
trades. They also have been, and may continue to be, adversely affected by
economic conditions in the countries with which they trade.
In
addition, commodities (such as oil, gas and minerals) represent a significant
percentage of certain emerging market countries’ exports and these economies are
particularly sensitive to fluctuations in commodity prices. Adverse economic
events in one country may have a significant adverse effect on other countries
of this region. In addition, most emerging market countries have experienced, at
one time or another, severe and persistent levels of inflation, including, in
some cases, hyperinflation. This has, in turn, led to high interest rates,
extreme measures by governments to keep inflation in check, and a generally
debilitating effect on economic growth.
Although
inflation in many countries has lessened, there is no guarantee it will remain
at lower levels. The political history of certain emerging market countries has
been characterized by political uncertainty, intervention by the military in
civilian and economic spheres, and political corruption. Such events could
reverse favorable trends toward market and economic reform, privatization, and
removal of trade barriers, and result in significant disruption in securities
markets in the region.
Also,
from time to time, certain issuers located in emerging market countries in which
the Fund invests may operate in, or have dealings with, countries subject to
sanctions and/or embargoes imposed by the U.S. Government and the United Nations
and/or countries identified by the U.S. Government as state sponsors of
terrorism. As a result, an issuer may sustain damage to its reputation if it is
identified as an issuer which operates in, or has dealings with, such countries.
The Fund, as an investor in such issuers, will be indirectly subject to those
risks.
The
economies of one or more countries in which the Fund may invest may be in
various states of transition from a planned economy to a more market oriented
economy. The economies of such countries differ from the economies of most
developed countries in many respects, including levels of government
involvement, states of development, growth rates, control of foreign exchange
and allocation of resources. Economic growth in these economies may be uneven
both geographically and among various sectors of their economies and may also be
accompanied by periods of high inflation. Political changes, social instability
and adverse diplomatic developments in these countries could result in the
imposition of additional government restrictions, including expropriation of
assets, confiscatory taxes or nationalization of some or all of the property
held by the underlying issuers of securities of emerging market issuers. There
is no guarantee that the governments of these countries will not revert back to
some form of planned or non-market oriented economy, and such governments
continue to be active participants in many economic sectors through ownership
positions and regulation. The allocation of resources in such countries is
subject to a high level of government control. Such countries’ governments may
strictly regulate the payment of foreign currency denominated obligations and
set monetary policy. Through their policies, these governments may provide
preferential treatment to particular industries or companies. The policies set
by the government of one of these countries could have a substantial effect on
that country’s economy.
Investment
and Repatriation Restrictions. The
government in an emerging market country may restrict or control to varying
degrees the ability of foreign investors to invest in securities of issuers
located or operating in such emerging market countries. These restrictions
and/or controls may at times limit or prevent foreign investment in securities
of issuers located or operating in emerging market countries and may inhibit the
Fund’s ability to meet its investment objective. In addition, the Fund may not
be able to buy or sell securities or receive full value for such securities.
Moreover, certain emerging market countries may require governmental approval or
special licenses prior to investments by foreign investors and may limit the
amount of investments by foreign investors in a particular industry and/or
issuer; may limit such foreign investment to a certain class of securities of an
issuer that may have less advantageous rights than the classes available for
purchase by domiciliaries of such emerging market countries; and/or may impose
additional taxes on foreign investors. A delay in obtaining a required
government approval or a license would delay investments in those emerging
market countries, and, as a result, the Fund may not be able to invest in
certain securities while approval is pending. The government of certain emerging
market countries may also withdraw or decline to renew a license that
enables
the Fund to invest in such country. These factors make investing in issuers
located or operating in emerging market countries significantly riskier than
investing in issuers located or operating in more developed countries, and any
one of them could cause a decline in the net asset value of the
Fund.
Additionally,
investments in issuers located in certain emerging market countries may be
subject to a greater degree of risk associated with governmental approval in
connection with the repatriation of investment income, capital or the proceeds
of sales of securities by foreign investors. Moreover, there is the risk that if
the balance of payments in an emerging market country declines, the government
of such country may impose temporary restrictions on foreign capital
remittances. Consequently, the Fund could be adversely affected by delays in, or
a refusal to grant, required governmental approval for repatriation of capital,
as well as by the application to the Fund of any restrictions on investments.
Furthermore, investments in emerging market countries may require the Fund to
adopt special procedures, seek local government approvals or take other actions,
each of which may involve additional costs to the Fund.
Available
Disclosure About Emerging Market Issuers. Issuers
located or operating in emerging market countries are not subject to the same
rules and regulations as issuers located or operating in more developed
countries. Therefore, there may be less financial and other information publicly
available with regard to issuers located or operating in emerging market
countries and such issuers are not subject to the uniform accounting, auditing
and financial reporting standards applicable to issuers located or operating in
more developed countries.
Foreign
Currency Considerations. The
Fund’s assets that are invested in securities of issuers in emerging market
countries will generally be denominated in foreign currencies, and the proceeds
received by the Fund from these investments will be principally in foreign
currencies. The value of an emerging market country’s currency may be subject to
a high degree of fluctuation. This fluctuation may be due to changes in interest
rates, the effects of monetary policies issued by the United States, foreign
governments, central banks or supranational entities, the imposition of currency
controls or other national or global political or economic developments. The
economies of certain emerging market countries can be significantly affected by
currency devaluations. Certain emerging market countries may also have managed
currencies which are maintained at artificial levels relative to the U.S. dollar
rather than at levels determined by the market. This type of system can lead to
sudden and large adjustments in the currency which, in turn, can have a
disruptive and negative effect on foreign investors.
The
Fund’s exposure to an emerging market country’s currency and changes in value of
such foreign currencies versus the U.S. dollar may reduce the Fund’s investment
performance and the value of your investment in the Fund. Meanwhile, the Fund
will compute and expects to distribute its income in U.S. dollars, and the
computation of income will be made on the date that the income is earned by the
Fund at the foreign exchange rate in effect on that date. Therefore, if the
value of the respective emerging market country’s currency falls relative to the
U.S. dollar between the earning of the income and the time at which the Fund
converts the relevant emerging market country’s currency to U.S. dollars, the
Fund may be required to liquidate certain positions in order to make
distributions if the Fund has insufficient cash in U.S. dollars to meet
distribution requirements under the Internal Revenue Code. The liquidation of
investments, if required, could be at disadvantageous prices or otherwise have
an adverse impact on the Fund’s performance.
Certain
emerging market countries also restrict the free conversion of their currency
into foreign currencies, including the U.S. dollar. There is no significant
foreign exchange market for many such currencies and it would, as a result, be
difficult for the Fund to engage in foreign currency transactions designed to
protect the value of the Fund’s interests in securities denominated in such
currencies. Furthermore, if permitted, the Fund may incur costs in connection
with conversions between U.S. dollars and an emerging market country’s currency.
Foreign exchange dealers realize a profit based on the difference between the
prices at which they are buying and selling various currencies. Thus, a dealer
normally will offer to sell a foreign currency to the Fund at one rate, while
offering a lesser rate of exchange should the Fund desire immediately to resell
that currency to the dealer. The Fund will conduct its foreign currency exchange
transactions either on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange market,
or through entering into forward, futures or options contracts to purchase or
sell foreign currencies.
Operational
and Settlement Risk. In
addition to having less developed securities markets, emerging market countries
have less developed custody and settlement practices than certain developed
countries. Rules adopted under the Investment Company Act of 1940 permit the
Fund to maintain its foreign securities and cash in the custody of certain
eligible non-U.S. banks and securities depositories. Banks in emerging market
countries that are eligible foreign sub-custodians may be recently organized or
otherwise lack extensive operating experience. In addition, in certain emerging
market countries there may be legal restrictions or limitations on the ability
of the Fund to recover assets held in custody by a foreign sub-custodian in the
event of the bankruptcy of the sub-custodian. Because settlement systems in
emerging market countries may be less organized than in other developed markets,
there may be a risk that settlement may be delayed and that cash or securities
of the Fund may be in jeopardy because of failures of or defects in the systems.
Under the laws in many emerging market countries, the Fund may be required to
release local shares before receiving cash payment or may be required to make
cash payment prior to receiving local shares, creating a risk that the Fund
may
surrender cash or securities without ever receiving securities or cash from the
other party. Settlement systems in emerging market countries also have a higher
risk of failed trades and back to back settlements may not be
possible.
The
Fund may not be able to convert a foreign currency to U.S. dollars in time for
the settlement of redemption requests. In the event that the Fund is not able to
convert the foreign currency to U.S. dollars in time for settlement, which may
occur as a result of the delays described above, the Fund may be required to
liquidate certain investments and/or borrow money in order to fund such
redemption. The liquidation of investments, if required, could be at
disadvantageous prices or otherwise have an adverse impact on the Fund’s
performance (e.g.,
by causing the Fund to overweight foreign currency denominated holdings and
underweight other holdings which were sold to fund redemptions). In addition,
the Fund will incur interest expense on any borrowings and the borrowings will
cause the Fund to be leveraged, which may magnify gains and losses on its
investments.
In
certain emerging market countries, the marketability of investments may be
limited due to the restricted opening hours of trading exchanges, and a
relatively high proportion of market value may be concentrated in the hands of a
relatively small number of investors. In addition, because certain emerging
market countries’ trading exchanges on which the Fund’s portfolio securities may
trade are open when the relevant exchanges are closed, the Fund may be subject
to heightened risk associated with market movements. Trading volume may be lower
on certain emerging market countries’ trading exchanges than on more developed
securities markets and securities may be generally less liquid. The
infrastructure for clearing, settlement and registration on the primary and
secondary markets of certain emerging market countries are less developed than
in certain other markets and under certain circumstances this may result in the
Fund experiencing delays in settling and/or registering transactions in the
markets in which it invests, particularly if the growth of foreign and domestic
investment in certain emerging market countries places an undue burden on such
investment infrastructure. Such delays could affect the speed with which the
Fund can transmit redemption proceeds and may inhibit the initiation and
realization of investment opportunities at optimum times.
Certain
issuers in emerging market countries may utilize share blocking schemes. Share
blocking refers to a practice, in certain foreign markets, where voting rights
related to an issuer’s securities are predicated on these securities being
blocked from trading at the custodian or sub-custodian level for a period of
time around a shareholder meeting. These restrictions have the effect of barring
the purchase and sale of certain voting securities within a specified number of
days before and, in certain instances, after a shareholder meeting where a vote
of shareholders will be taken. Share blocking may prevent the Fund from buying
or selling securities for a period of time. During the time that shares are
blocked, trades in such securities will not settle. The blocking period can last
up to several weeks. The process for having a blocking restriction lifted can be
quite onerous with the particular requirements varying widely by country. In
addition, in certain countries, the block cannot be removed. As a result of the
ramifications of voting ballots in markets that allow share blocking, the
Adviser, on behalf of the Fund, reserves the right to abstain from voting
proxies in those markets.
Corporate
and Securities Laws. Securities
laws in emerging market countries are relatively new and unsettled and,
consequently, there is a risk of rapid and unpredictable change in laws
regarding foreign investment, securities regulation, title to securities and
securityholders rights. Accordingly, foreign investors may be adversely affected
by new or amended laws and regulations. In addition, the systems of corporate
governance to which emerging market issuers are subject may be less advanced
than those systems to which issuers located in more developed countries are
subject, and therefore, securityholders of issuers located in emerging market
countries may not receive many of the protections available to securityholders
of issuers located in more developed countries. In circumstances where adequate
laws and securityholders rights exist, it may not be possible to obtain swift
and equitable enforcement of the law. In addition, the enforcement of systems of
taxation at federal, regional and local levels in emerging market countries may
be inconsistent and subject to sudden change. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited.
Environmental-Related
Securities Risk. Companies
that promote positive environmental policies may not perform as well as
companies that do not pursue such goals. Issuers engaged in environmentally
beneficial business lines may be difficult to identify and investments in them
maybe volatile. They may be highly dependent upon government subsidies,
contracts with government entities, and the successful development of new and
proprietary technologies. Such technologies risk rapid product obsolescence,
short product cycles, and competition from new market entrants. Current
valuation methods used to value companies involved in alternative, clean water,
and clean power technology sectors, for example, may not have been in widespread
use for a significant period of time, and it may be difficult to value share
prices of such issuers. In addition, seasonal weather conditions, fluctuations
in supply of and demand for clean energy products (including, in relation to
traditional energy products, such as oil and gas), changes in energy prices, and
international political events may cause fluctuations in the performance of
these issuers and the prices of their securities. Environmentally-focused
investing is qualitative and subjective by nature, and there is no guarantee
that the factors utilized by the Adviser or any judgment exercised by the
Adviser will reflect the opinions of any particular investor. Information
regarding responsible practices is obtained through voluntary or third-party
reporting, which may not be accurate or complete, and the Adviser is dependent
on such information to evaluate a company’s commitment to, or implementation of,
responsible practices.
Equity Securities Risk.
The
value of the equity securities held by the Fund may fall due to general market
and economic conditions, perceptions regarding the markets in which the issuers
of securities held by the Fund participate, or factors relating to specific
issuers in which the Fund invests. Equity securities are subordinated to
preferred securities and debt in a company’s capital structure with respect to
priority to a share of corporate income, and therefore will be subject to
greater dividend risk than preferred securities or debt instruments. In
addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those
returns.
Foreign Currency Risk.
The Fund’s exposure to foreign currencies and changes in the value of foreign
currencies versus the U.S. dollar may result in reduced returns for the Fund,
and the value of certain foreign currencies may be subject to a high degree of
fluctuation. The Fund may also incur costs in connection with conversions
between U.S. dollars and foreign currencies.
Foreign
Securities Risk. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments. Foreign market trading
hours, clearance and settlement procedures, and holiday schedules may limit the
Fund's ability to buy and sell securities.
Industrials
Sector Risk. The
Fund may be sensitive to, and its performance may depend to a greater extent on,
the overall condition of the industrials sector. The industrials sector
comprises companies who produce capital goods used in construction and
manufacturing, such as companies that make and sell machinery, equipment and
supplies that are used to produce other goods. Companies in the industrials
sector may be adversely affected by changes in government regulation, world
events and economic conditions. In addition, companies in the industrials sector
be adversely affected by environmental damages, product liability claims and
exchange rates.
Information
Technology Sector Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the information technology sector. Information
technology companies face intense competition, both domestically and
internationally, which may have an adverse effect on profit margins. Information
technology companies may have limited product lines, markets, financial
resources or personnel. The products of information technology companies may
face product obsolescence due to rapid technological developments and frequent
new product introduction, unpredictable changes in growth rates and competition
for the services of qualified personnel. Companies in the information technology
sector are heavily dependent on patent protection and the expiration of patents
may adversely affect the profitability of these companies.
Market
Risk.
The prices of securities are subject to the risks associated with investing in
the securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the Investment Company Act of 1940. The Fund is subject to the risk
that it will be more volatile than a diversified fund because the Fund may
invest a relatively high percentage of its assets in a smaller number of issuers
or may invest a larger proportion of its assets in a single issuer. Moreover,
the gains and losses on a single investment may have a greater impact on the
Fund’s net asset value and may make the Fund more volatile than more diversified
funds. The Fund may be particularly vulnerable to this risk if it is comprised
of a limited number of investments.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Risk
of Investing in Other Funds.
The Fund may invest in shares of other funds, including ETFs. As a result, the
Fund will indirectly be exposed to the risks of an investment in the underlying
funds. As a shareholder in a fund, the Fund would bear its ratable share of that
entity’s expenses. At the same time, the Fund would continue to pay its own
investment management fees and other expenses. As a result, the Fund and its
shareholders will be absorbing additional levels of fees with respect to
investments in other funds, including ETFs.
Small-
and Medium-Capitalization Companies Risk.
The Fund may invest in small- and medium-capitalization companies and, therefore
will be subject to certain risks associated with small- and medium-
capitalization companies. These companies are often subject to less analyst
coverage and may be in early and less predictable periods of their corporate
existences, with little or no record of profitability. In addition, these
companies often have greater price volatility, lower trading volume and less
liquidity than larger more established companies. These companies tend to have
smaller revenues, narrower product lines, less management depth and experience,
smaller shares of their product or service markets, fewer financial resources
and less
competitive
strength than large-capitalization companies. Returns on investments in
securities of small- and medium-capitalization companies could trail the returns
on investments in securities of larger companies.
Special
Purpose Acquisition Companies Risk.
Equity
securities in which the Fund invests include stock, rights, warrants, and other
interests in special purpose acquisition companies (“SPACs”) or similar special
purpose entities. A SPAC is typically a publicly traded company that raises
investment capital via an initial public offering for the purpose of acquiring
one or more existing companies (or interests therein) via merger, combination,
acquisition or other similar transactions. If the Fund purchases shares of a
SPAC in an initial public offering it will generally bear a sales commission,
which may be significant. The shares of a SPAC are often issued in “units” that
include one share of common stock and one right or warrant (or partial right or
warrant) conveying the right to purchase additional shares or partial shares. In
some cases, the rights and warrants may be separated from the common stock at
the election of the holder, after which they may become freely tradeable. After
going public and until a transaction is completed, a SPAC generally invests the
proceeds of its initial public offering (less a portion retained to cover
expenses) in U.S. Government securities, money market securities and cash. To
the extent the SPAC is invested in cash or similar securities, this may impact
the Fund’s ability to meet its investment objective. If a SPAC does not complete
a transaction within a specified period of time after going public, the SPAC is
typically dissolved, at which point the invested funds are returned to the
SPAC’s shareholders (less certain permitted expenses) and any rights or warrants
issued by the SPAC expire worthless. SPACs generally provide their investors
with the option of redeeming an investment in the SPAC at or around the time of
effecting a transaction. In some cases, the Fund may forfeit its right to
receive additional warrants or other interests in the SPAC if it redeems its
interest in the SPAC in connection with a transaction. Because SPACs often do
not have an operating history or ongoing business other than seeking a
transaction, the value of their securities may be particularly dependent on the
quality of its management and on the ability of the SPAC’s management to
identify and complete a profitable transaction. Some SPACs may pursue
transactions only within certain industries or regions, which may increase the
volatility of an investment in them. In addition, the securities issued by a
SPAC, which may be traded in the over-the-counter market, may become illiquid
and/or may be subject to restrictions on resale. Other risks of investing in
SPACs include that a significant portion of the monies raised by the SPAC may be
expended during the search for a target transaction; an attractive transaction
may not be identified at all (or any requisite approvals may not be obtained)
and the SPAC may be required to return any remaining monies to shareholders; a
transaction once identified or effected may prove unsuccessful and an investment
in the SPAC may lose value; the warrants or other rights with respect to the
SPAC held by the Fund may expire worthless or may be repurchased or retired by
the SPAC at an unfavorable price; and an investment in a SPAC may be diluted by
additional later offerings of interests in the SPAC or by other investors
exercising existing rights to purchase shares of the SPAC.
Sustainability
Investing Strategy Risk.
The Fund’s sustainability strategy could cause it to perform differently
compared to funds that do not have a sustainability focus. The Fund’s
sustainability strategy may result in the Fund investing in securities or
industry
sectors that underperform other securities or underperform the market as a
whole, and may result in the Fund being unable to take advantage of certain
investment opportunities, which may adversely affect investment
performance.
The Fund is also subject to the risk that the companies identified by the
Adviser do not operate as expected when addressing sustainability
issues. Regulatory changes or interpretations regarding the definitions and/or
use of sustainability criteria could have a material adverse effect on the
Fund’s ability to invest in accordance with its sustainability
strategy.
Utilities
Sector Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the utilities sector. Companies in the
utilities sector may be adversely affected by changes in exchange rates,
domestic and international competition, difficulty in raising adequate amounts
of capital and governmental limitation on rates charged to
customers.
PERFORMANCE
The following
chart and table provide some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual total returns compare with those of a broad measure of
market performance. For instance, the MSCI AC World Daily TR
Gross USD Index represents large- and mid-cap companies across developed and
emerging market countries. The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. The annual returns in the bar chart
are for the Fund’s Class A shares and do not reflect sales loads. If sales loads
were reflected, returns would be lower than those
shown.
Additionally, large purchases and/or
redemptions of shares of a class, relative to the amount of assets represented
by the class, may cause the annual returns for each class to differ. Updated
performance information for the Fund is available on the VanEck website at
vaneck.com.
CLASS A: Annual Total Returns (%) as of
12/31
|
|
|
|
|
|
|
|
|
Best
Quarter: |
+1.66% |
3Q
2022 |
Worst
Quarter: |
-19.75% |
2Q
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Annual Total Returns as of
12/31/2022 |
1
Year |
|
|
Life
of Class |
|
|
Class
A Shares
(7/14/21) |
|
|
|
|
|
|
Before Taxes |
-28.77% |
|
|
-22.28% |
|
|
After
Taxes on Distributions1 |
-29.02% |
|
|
-22.47% |
|
|
After Taxes on Distributions and Sale
of Fund Shares |
-16.89% |
|
|
-16.74% |
|
|
Class
I Shares
(7/14/21) |
|
|
|
|
|
|
Before Taxes |
-24.23% |
|
|
-18.85% |
|
|
Class
Y Shares
(7/14/21) |
|
|
|
|
|
|
Before Taxes |
-24.30% |
|
|
-18.92% |
|
|
MSCI
AC World Daily TR Gross USD Index
(reflects no deduction for
fees, expenses or taxes except withholding
taxes) |
-17.96% |
|
|
-9.80% |
|
|
|
|
|
|
|
|
1 After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
These returns are shown for
one class of shares only; after-tax returns for the other classes may
vary. Actual after-tax returns depend on your individual tax
situation and may differ from those shown in the preceding table. The after-tax return
information shown above does not apply to Fund shares held through a
tax-advantaged account, such as a 401(k) plan or Investment Retirement
Account.
PORTFOLIO
MANAGEMENT
Investment
Adviser. Van Eck Associates Corporation
Portfolio
Managers.
Shawn
Reynolds has been Portfolio Manager of the Fund since inception. Veronica Zhang
has been Deputy Portfolio Manager of the Fund since inception. Mr. Reynolds has
been a Portfolio Manager with the Adviser since 2010. Ms. Zhang joined the
Adviser in 2013 as an alternative energy analyst.
PURCHASE
AND SALE OF FUND SHARES
In
general, shares of the Fund may be purchased or redeemed on any business day,
primarily through financial representatives such as brokers or advisers, or
directly by eligible investors through the Fund’s transfer agent. Purchase
minimums for Classes A and Y shares are $1,000 for an initial purchase and $100
for a subsequent purchase, with no purchase minimums for any purchase through a
retirement or pension plan account, for any “wrap fee” account and similar
programs offered without a sales charge by certain financial institutions and
third-party recordkeepers and/or administrators, and for any account using the
Automatic Investment Plan, or for any other periodic purchase
program.
Purchase
minimums for Class I shares are $1 million for an initial purchase and no
minimum for a subsequent purchase; the initial minimum may be reduced or waived
at the Adviser’s discretion.
TAX
INFORMATION
The
Fund normally distributes net investment income and net realized capital gains,
if any, to shareholders annually. These distributions are generally taxable to
you as ordinary income or capital gains, unless you are investing through a tax
advantaged retirement account, such as a 401(k) plan or an individual retirement
account (IRA), in which case your distributions may be taxed as ordinary income
when withdrawn from such account.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a bank), the Fund and/or its affiliates may pay the intermediary for
the sale of Fund shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your financial professional to recommend the Fund over another investment. Ask
your financial professional or visit your financial intermediary’s website for
more information.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
The Global Resources Fund
seeks long-term capital appreciation by investing primarily in global resource
securities. Income is a secondary
consideration.
FUND FEES AND EXPENSES
This
table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund. You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
You may qualify for Class A sales charge
discounts if you and your family (includes spouse and children under age 21)
invest, or agree to invest in the future, at least $25,000, in the
aggregate, in Classes A and C of the VanEck
Funds. More information about these and other
discounts is available from your financial professional and in the “Shareholder
Information-Sales Charges” section of this prospectus, in the “Availability of
Discounts” section of the Fund’s SAI and, with respect to purchases of shares
through specific intermediaries, in Appendix A to this prospectus, entitled
“Intermediary Sales Charge Discounts and
Waivers”.
Shareholder
Fees
(fees
paid directly from your investment)
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Class
A |
Class
C |
Class
I |
Class
Y |
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Maximum
Sales Charge (load) imposed on purchases (as a percentage of offering
price) |
5.75% |
0.00% |
0.00% |
0.00% |
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Maximum
Deferred Sales Charge (load) (as a percentage of the lesser of the net
asset value or purchase price) |
0.00%¹ |
1.00% |
0.00% |
0.00% |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Class
A |
Class
C |
Class
I |
Class
Y |
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Management
Fees |
1.00% |
1.00% |
1.00% |
1.00% |
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Distribution
and/or Service (12b-1) Fees |
0.25% |
1.00% |
0.00% |
0.00% |
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Other
Expenses |
0.22% |
0.39% |
0.10% |
0.14% |
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Total
Annual Fund Operating Expenses |
1.47% |
2.39% |
1.10% |
1.14% |
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Fee
Waivers and/or Expense Reimbursements2 |
-0.09% |
-0.19% |
-0.15% |
-0.01% |
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Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursements |
1.38% |
2.20% |
0.95% |
1.13% |
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1
A contingent deferred
sales charge for Class A shares of 1.00% for one year applies to redemptions of
qualified commissionable shares purchased at or above the $1 million breakpoint
level.
2
Van Eck Associates
Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to
the extent necessary to prevent the operating expenses of the Fund (excluding
acquired fund fees and expenses, interest expense, trading expenses, dividends
and interest payments on securities sold short, taxes and extraordinary
expenses) from exceeding 1.38% for Class A, 2.20% for Class C, 0.95% for Class
I, and 1.13% for Class Y of the Fund’s average daily net assets per year until
May 1,
2024. During such time, the expense limitation is expected to
continue until the Board of Trustees acts to discontinue all or a portion of
such expense limitation.
EXPENSE EXAMPLE
The following example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes that you invest $10,000
in the Fund for the time periods indicated and then either redeem all of your
shares at the end of these periods or continue to hold them. The example also
assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same, and applies fee waivers and/or expense
reimbursements, if any, for the periods indicated above under “Annual Fund
Operating Expenses.” Although your actual expenses may be higher or lower, based
on these assumptions, your costs would be:
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Share
Status |
1
Year |
3
Years |
5
Years |
10
Years |
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Class
A |
Sold
or Held |
$707 |
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$1,005 |
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$1,323 |
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$2,224 |
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Class
C |
Sold |
$323 |
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$727 |
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$1,258 |
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$2,712 |
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Held |
$223 |
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$727 |
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$1,258 |
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$2,712 |
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Class
I |
Sold
or Held |
$97 |
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$335 |
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$592 |
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$1,327 |
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Class
Y |
Sold
or Held |
$115 |
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$361 |
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$627 |
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$1,385 |
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PORTFOLIO
TURNOVER
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate that the Fund pays
higher transaction costs and may result in higher taxes when Fund shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the
most recent fiscal year, the Fund’s portfolio turnover rate was 34% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
Under normal conditions, the Fund
invests at least 80% of its net assets in securities of “global resource”
companies and instruments that derive their value from “global resources”.
Global resources include precious metals (including gold), base and industrial
metals, energy, natural resources and other commodities. A
global resource company is a company that derives, directly or indirectly, at
least 50% of its revenues from exploration, development, production,
distribution or facilitation of processes relating to global resources. The Fund
concentrates its investments in the securities of global resource companies and
instruments that derive their value from global resources.
The
Fund may invest without limitation in any one global resources sector and is not
required to invest any portion of its assets in any one global resources sector.
The Fund may invest in securities of companies located anywhere in the world,
including the U.S. Under ordinary circumstances, the Fund will invest in
securities of issuers from a number of different countries, and may invest any
amount of its assets in emerging markets. The Fund may invest in securities of
companies of any capitalization range. Utilizing qualitative and quantitative
measures, the Fund’s investment management team selects equity securities of
companies that it believes represent value opportunities and/or that have growth
potential. Candidates for the Fund’s portfolio are evaluated based on their
relative desirability using a wide range of criteria and are regularly reviewed
to ensure that they continue to offer absolute and relative desirability. The
analysis of financially material risks and opportunities related to ESG (i.e.
Environmental, Social and Governance) factors is a component of the overall
investment process. ESG considerations can affect the Adviser’s fundamental
assessment of a company or country.
The
Fund may use derivative instruments, such as structured notes, warrants,
currency forwards, futures contracts, options and swap agreements, to gain or
hedge exposure to global resources, global resource companies and other assets.
The Fund may enter into foreign currency transactions to attempt to moderate the
effect of currency fluctuations. The Fund may write covered call options on
portfolio securities to the extent that the value of all securities with respect
to which covered calls are written does not exceed 10% of the Fund’s net asset
value. The Fund may also invest up to 20% of its net assets in securities issued
by other investment companies, including exchange-traded funds (“ETFs”). The
Fund may also invest in money market funds, but these investments are not
subject to this limitation. The Fund may invest in ETFs to participate in, or
gain exposure to, certain market sectors, or when direct investments in certain
countries are not permitted or available.
PRINCIPAL RISKS
There
is no assurance that the Fund will achieve its investment objective.
The Fund’s share price and return will fluctuate with
changes in the market value of the Fund’s portfolio securities. Accordingly, an
investment in the Fund involves the risk of losing
money.
Active
Management Risk.
In managing the Fund’s portfolio, the Adviser will apply investment techniques
and risk analyses in making investment decisions for the Fund, but there can be
no guarantee that these will produce the desired results. Investment decisions
made by the Adviser in seeking to achieve the Fund’s investment objective may
cause a decline in the value of the investments held by the Fund and, in turn,
cause the Fund’s shares to lose value or underperform other funds with similar
investment objectives.
Commodities
and Commodity-Linked Derivatives Risk.
Exposure to the commodities markets, such as precious metals, industrial metals,
gas and other energy products and natural resources, may subject the Fund to
greater volatility than investments in traditional securities. The commodities
markets may fluctuate widely based on a variety of factors including changes in
overall market movements, political and economic events and policies, war,
disease, acts of terrorism, natural disasters, and changes in interest rates or
inflation rates. Because the value of a commodity-linked derivative instrument
and structured note typically are based upon the price movements of physical
commodities, the value of these securities will rise or fall in response to
changes in
the
underlying commodities or in the related investment index. The tax treatment of
commodity-linked derivative instruments may be adversely affected by changes in
legislation, regulations or other legally binding authority. If, as a result of
any such adverse action, the income of the Fund from certain commodity-linked
derivatives were treated as non-qualifying income, the Fund may fail to qualify
as a regulated investment company and/or be subject to federal income tax at the
Fund level. The uncertainty surrounding the treatment of certain derivative
instruments under the qualification tests for a regulated investment company may
limit the Fund’s use of such derivative instruments.
Derivatives
Risk.
Derivatives and other similar instruments (referred to collectively as
“derivatives”) are financial instruments whose values are based on the value of
one or more reference assets or indicators, such as a security, currency,
interest rate, or index. The Fund’s use of derivatives involves risks different
from, and possibly greater than, the risks associated with investing directly in
securities and other more traditional investments. Moreover, although the value
of a derivative is based on an underlying asset or indicator, a derivative
typically does not carry the same rights as would be the case if the Fund
invested directly in the underlying securities, currencies or other
assets.
Derivatives
are subject to a number of risks, such as potential changes in value in response
to market developments or, in the case of “over-the-counter” derivatives, as a
result of a counterparty’s credit quality and the risk that a derivative
transaction may not have the effect the Adviser anticipated. Derivatives also
involve the risk of mispricing or improper valuation and the risk that changes
in the value of a derivative may not achieve the desired correlation with the
underlying asset or indicator. Derivative transactions can create investment
leverage and may be highly volatile, and the Fund could lose more than the
amount it invests. The use of derivatives may increase the amount and affect the
timing and character of taxes payable by shareholders of the Fund.
Many
derivative transactions are entered into “over-the-counter” without a central
clearinghouse; as a result, the value of such a derivative transaction will
depend on, among other factors, the ability and the willingness of the Fund’s
counterparty to perform its obligations under the transaction. If a counterparty
were to default on its obligations, the Fund’s contractual remedies against such
counterparty may be subject to bankruptcy and insolvency laws, which could
affect the Fund’s rights as a creditor (e.g.,
the Fund may not receive the net amount of payments that it is contractually
entitled to receive). Counterparty risk also refers to the related risks of
having concentrated exposure to such a counterparty. A liquid secondary market
may not always exist for the Fund’s derivative positions at any time, and the
Fund may not be able to initiate or liquidate a swap position at an advantageous
time or price, which may result in significant losses. The Fund may also face
the risk that it may not be able to meet margin and payment requirements and
maintain a derivatives position.
Derivatives
are also subject to operational and legal risks. Operational risk generally
refers to risk related to potential operational issues, including documentation
issues, settlement issues, system failures, inadequate controls, and human
errors. Legal risk generally refers to insufficient documentation, insufficient
capacity or authority of counterparty, or legality or enforceability of a
contract.
Direct
Investments Risk.
Direct investments may involve a high degree of business and financial risk that
can result in substantial losses. Because of the absence of any public trading
market for these investments, the Fund may take longer to liquidate these
positions than would be the case for publicly traded securities. Direct
investments are generally considered illiquid and will be aggregated with other
illiquid investments for purposes of the Fund's limitation on illiquid
investments.
Emerging
Market Issuers Risk.
Investments in securities of emerging market issuers involve risks not typically
associated with investments in securities of issuers in more developed countries
that may negatively affect the value of your investment in the Fund. Such
heightened risks may include, among others, expropriation and/or nationalization
of assets, restrictions on and government intervention in international trade,
confiscatory taxation, political instability, including authoritarian and/or
military involvement in governmental decision making, armed conflict, the impact
on the economy as a result of civil war, crime (including drug violence) and
social instability as a result of religious, ethnic and/or socioeconomic unrest.
Issuers in certain emerging market countries are subject to less stringent
requirements regarding accounting, auditing, financial reporting and record
keeping than are issuers in more developed markets, and therefore, all material
information may not be available or reliable. Emerging markets are also more
likely than developed markets to experience problems with the clearing and
settling of trades, as well as the holding of securities by local banks, agents
and depositories. Low trading volumes and volatile prices in less developed
markets may make trades harder to complete and settle, and governments or trade
groups may compel local agents to hold securities in designated depositories
that may not be subject to independent evaluation. Local agents are held only to
the standards of care of their local markets. In general, the less developed a
country’s securities markets are, the greater the likelihood of custody
problems. Additionally, each of the factors described below could have a
negative impact on the Fund’s performance and increase the volatility of the
Fund.
Securities
Markets. Securities
markets in emerging market countries are underdeveloped and are often considered
to be less correlated to global economic cycles than those markets located in
more developed countries. Securities markets in emerging market countries are
subject to greater risks associated with market volatility, lower market
capitalization, lower trading volume, illiquidity, inflation, greater price
fluctuations, uncertainty regarding the existence of trading markets,
governmental control and heavy regulation of labor and industry. These factors,
coupled with restrictions on foreign investment and other factors, limit the
supply of securities available for investment by the Fund. This will affect the
rate at which the Fund is able to invest in emerging market countries, the
purchase and sale prices for such securities
and
the timing of purchases and sales. Emerging markets can experience high rates of
inflation, deflation and currency devaluation. The prices of certain securities
listed on securities markets in emerging market countries have been subject to
sharp fluctuations and sudden declines, and no assurance can be given as to the
future performance of listed securities in general. Volatility of prices may be
greater than in more developed securities markets. Moreover, securities markets
in emerging market countries may be closed for extended periods of time or
trading on securities markets may be suspended altogether due to political or
civil unrest. Market volatility may also be heightened by the actions of a small
number of investors. Brokerage firms in emerging market countries may be fewer
in number and less established than brokerage firms in more developed markets.
Since the Fund may need to effect securities transactions through these
brokerage firms, the Fund is subject to the risk that these brokerage firms will
not be able to fulfill their obligations to the Fund. This risk is magnified to
the extent the Fund effects securities transactions through a single brokerage
firm or a small number of brokerage firms. In addition, the infrastructure for
the safe custody of securities and for purchasing and selling securities,
settling trades, collecting dividends, initiating corporate actions, and
following corporate activity is not as well developed in emerging market
countries as is the case in certain more developed markets.
Political
and Economic Risk.
Certain emerging market countries have historically been subject to political
instability and their prospects are tied to the continuation of economic and
political liberalization in the region. Instability may result from factors such
as government or military intervention in decision making, terrorism, civil
unrest, extremism or hostilities between neighboring countries. Any of these
factors, including an outbreak of hostilities could negatively impact the Fund’s
returns. Limited political and democratic freedoms in emerging market countries
might cause significant social unrest. These factors may have a significant
adverse effect on an emerging market country’s economy.
Many
emerging market countries may be heavily dependent upon international trade and,
consequently, may continue to be negatively affected by trade barriers, exchange
controls, managed adjustments in relative currency values and other
protectionist measures imposed or negotiated by the countries with which it
trades. They also have been, and may continue to be, adversely affected by
economic conditions in the countries with which they trade.
In
addition, commodities (such as oil, gas and minerals) represent a significant
percentage of certain emerging market countries’ exports and these economies are
particularly sensitive to fluctuations in commodity prices. Adverse economic
events in one country may have a significant adverse effect on other countries
of this region. In addition, most emerging market countries have experienced, at
one time or another, severe and persistent levels of inflation, including, in
some cases, hyperinflation. This has, in turn, led to high interest rates,
extreme measures by governments to keep inflation in check, and a generally
debilitating effect on economic growth.
Although
inflation in many countries has lessened, there is no guarantee it will remain
at lower levels. The political history of certain emerging market countries has
been characterized by political uncertainty, intervention by the military in
civilian and economic spheres, and political corruption. Such events could
reverse favorable trends toward market and economic reform, privatization, and
removal of trade barriers, and result in significant disruption in securities
markets in the region.
Also,
from time to time, certain issuers located in emerging market countries in which
the Fund invests may operate in, or have dealings with, countries subject to
sanctions and/or embargoes imposed by the U.S. Government and the United Nations
and/or countries identified by the U.S. Government as state sponsors of
terrorism. As a result, an issuer may sustain damage to its reputation if it is
identified as an issuer which operates in, or has dealings with, such countries.
The Fund, as an investor in such issuers, will be indirectly subject to those
risks.
The
economies of one or more countries in which the Fund may invest may be in
various states of transition from a planned economy to a more market oriented
economy. The economies of such countries differ from the economies of most
developed countries in many respects, including levels of government
involvement, states of development, growth rates, control of foreign exchange
and allocation of resources. Economic growth in these economies may be uneven
both geographically and among various sectors of their economies and may also be
accompanied by periods of high inflation. Political changes, social instability
and adverse diplomatic developments in these countries could result in the
imposition of additional government restrictions, including expropriation of
assets, confiscatory taxes or nationalization of some or all of the property
held by the underlying issuers of securities of emerging market issuers. There
is no guarantee that the governments of these countries will not revert back to
some form of planned or non-market oriented economy, and such governments
continue to be active participants in many economic sectors through ownership
positions and regulation. The allocation of resources in such countries is
subject to a high level of government control. Such countries’ governments may
strictly regulate the payment of foreign currency denominated obligations and
set monetary policy. Through their policies, these governments may provide
preferential treatment to particular industries or companies. The policies set
by the government of one of these countries could have a substantial effect on
that country’s economy.
Investment
and Repatriation Restrictions. The
government in an emerging market country may restrict or control to varying
degrees the ability of foreign investors to invest in securities of issuers
located or operating in such emerging market countries. These restrictions
and/or controls may at times limit or prevent foreign investment in securities
of issuers located or operating in emerging market countries and may inhibit the
Fund’s ability to meet its investment
objective.
In addition, the Fund may not be able to buy or sell securities or receive full
value for such securities. Moreover, certain emerging market countries may
require governmental approval or special licenses prior to investments by
foreign investors and may limit the amount of investments by foreign investors
in a particular industry and/or issuer; may limit such foreign investment to a
certain class of securities of an issuer that may have less advantageous rights
than the classes available for purchase by domiciliaries of such emerging market
countries; and/or may impose additional taxes on foreign investors. A delay in
obtaining a required government approval or a license would delay investments in
those emerging market countries, and, as a result, the Fund may not be able to
invest in certain securities while approval is pending. The government of
certain emerging market countries may also withdraw or decline to renew a
license that enables the Fund to invest in such country. These factors make
investing in issuers located or operating in emerging market countries
significantly riskier than investing in issuers located or operating in more
developed countries, and any one of them could cause a decline in the net asset
value of the Fund.
Additionally,
investments in issuers located in certain emerging market countries may be
subject to a greater degree of risk associated with governmental approval in
connection with the repatriation of investment income, capital or the proceeds
of sales of securities by foreign investors. Moreover, there is the risk that if
the balance of payments in an emerging market country declines, the government
of such country may impose temporary restrictions on foreign capital
remittances. Consequently, the Fund could be adversely affected by delays in, or
a refusal to grant, required governmental approval for repatriation of capital,
as well as by the application to the Fund of any restrictions on investments.
Furthermore, investments in emerging market countries may require the Fund to
adopt special procedures, seek local government approvals or take other actions,
each of which may involve additional costs to the Fund.
Available
Disclosure About Emerging Market Issuers. Issuers
located or operating in emerging market countries are not subject to the same
rules and regulations as issuers located or operating in more developed
countries. Therefore, there may be less financial and other information publicly
available with regard to issuers located or operating in emerging market
countries and such issuers are not subject to the uniform accounting, auditing
and financial reporting standards applicable to issuers located or operating in
more developed countries.
Foreign
Currency Considerations. The
Fund’s assets that are invested in securities of issuers in emerging market
countries will generally be denominated in foreign currencies, and the proceeds
received by the Fund from these investments will be principally in foreign
currencies. The value of an emerging market country’s currency may be subject to
a high degree of fluctuation. This fluctuation may be due to changes in interest
rates, the effects of monetary policies issued by the United States, foreign
governments, central banks or supranational entities, the imposition of currency
controls or other national or global political or economic developments. The
economies of certain emerging market countries can be significantly affected by
currency devaluations. Certain emerging market countries may also have managed
currencies which are maintained at artificial levels relative to the U.S. dollar
rather than at levels determined by the market. This type of system can lead to
sudden and large adjustments in the currency which, in turn, can have a
disruptive and negative effect on foreign investors.
The
Fund’s exposure to an emerging market country’s currency and changes in value of
such foreign currencies versus the U.S. dollar may reduce the Fund’s investment
performance and the value of your investment in the Fund. Meanwhile, the Fund
will compute and expects to distribute its income in U.S. dollars, and the
computation of income will be made on the date that the income is earned by the
Fund at the foreign exchange rate in effect on that date. Therefore, if the
value of the respective emerging market country’s currency falls relative to the
U.S. dollar between the earning of the income and the time at which the Fund
converts the relevant emerging market country’s currency to U.S. dollars, the
Fund may be required to liquidate certain positions in order to make
distributions if the Fund has insufficient cash in U.S. dollars to meet
distribution requirements under the Internal Revenue Code. The liquidation of
investments, if required, could be at disadvantageous prices or otherwise have
an adverse impact on the Fund’s performance.
Certain
emerging market countries also restrict the free conversion of their currency
into foreign currencies, including the U.S. dollar. There is no significant
foreign exchange market for many such currencies and it would, as a result, be
difficult for the Fund to engage in foreign currency transactions designed to
protect the value of the Fund’s interests in securities denominated in such
currencies. Furthermore, if permitted, the Fund may incur costs in connection
with conversions between U.S. dollars and an emerging market country’s currency.
Foreign exchange dealers realize a profit based on the difference between the
prices at which they are buying and selling various currencies. Thus, a dealer
normally will offer to sell a foreign currency to the Fund at one rate, while
offering a lesser rate of exchange should the Fund desire immediately to resell
that currency to the dealer. The Fund will conduct its foreign currency exchange
transactions either on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange market,
or through entering into forward, futures or options contracts to purchase or
sell foreign currencies.
Operational
and Settlement Risk.
In addition to having less developed securities markets, emerging market
countries have less developed custody and settlement practices than certain
developed countries. Rules adopted under the Investment Company Act of 1940
permit the Fund to maintain its foreign securities and cash in the custody of
certain eligible non-U.S. banks and securities depositories. Banks in emerging
market countries that are eligible foreign sub-
custodians
may be recently organized or otherwise lack extensive operating experience. In
addition, in certain emerging market countries there may be legal restrictions
or limitations on the ability of the Fund to recover assets held in custody by a
foreign sub-custodian in the event of the bankruptcy of the sub-custodian.
Because settlement systems in emerging market countries may be less organized
than in other developed markets, there may be a risk that settlement may be
delayed and that cash or securities of the Fund may be in jeopardy because of
failures of or defects in the systems. Under the laws in many emerging market
countries, the Fund may be required to release local shares before receiving
cash payment or may be required to make cash payment prior to receiving local
shares, creating a risk that the Fund may surrender cash or securities without
ever receiving securities or cash from the other party. Settlement systems in
emerging market countries also have a higher risk of failed trades and back to
back settlements may not be possible.
The
Fund may not be able to convert a foreign currency to U.S. dollars in time for
the settlement of redemption requests. In the event that the Fund is not able to
convert the foreign currency to U.S. dollars in time for settlement, which may
occur as a result of the delays described above, the Fund may be required to
liquidate certain investments and/or borrow money in order to fund such
redemption. The liquidation of investments, if required, could be at
disadvantageous prices or otherwise have an adverse impact on the Fund’s
performance (e.g.,
by causing the Fund to overweight foreign currency denominated holdings and
underweight other holdings which were sold to fund redemptions). In addition,
the Fund will incur interest expense on any borrowings and the borrowings will
cause the Fund to be leveraged, which may magnify gains and losses on its
investments.
In
certain emerging market countries, the marketability of investments may be
limited due to the restricted opening hours of trading exchanges, and a
relatively high proportion of market value may be concentrated in the hands of a
relatively small number of investors. In addition, because certain emerging
market countries’ trading exchanges on which the Fund’s portfolio securities may
trade are open when the relevant exchanges are closed, the Fund may be subject
to heightened risk associated with market movements. Trading volume may be lower
on certain emerging market countries’ trading exchanges than on more developed
securities markets and securities may be generally less liquid. The
infrastructure for clearing, settlement and registration on the primary and
secondary markets of certain emerging market countries are less developed than
in certain other markets and under certain circumstances this may result in the
Fund experiencing delays in settling and/or registering transactions in the
markets in which it invests, particularly if the growth of foreign and domestic
investment in certain emerging market countries places an undue burden on such
investment infrastructure. Such delays could affect the speed with which the
Fund can transmit redemption proceeds and may inhibit the initiation and
realization of investment opportunities at optimum times.
Certain
issuers in emerging market countries may utilize share blocking schemes. Share
blocking refers to a practice, in certain foreign markets, where voting rights
related to an issuer’s securities are predicated on these securities being
blocked from trading at the custodian or sub-custodian level for a period of
time around a shareholder meeting. These restrictions have the effect of barring
the purchase and sale of certain voting securities within a specified number of
days before and, in certain instances, after a shareholder meeting where a vote
of shareholders will be taken. Share blocking may prevent the Fund from buying
or selling securities for a period of time. During the time that shares are
blocked, trades in such securities will not settle. The blocking period can last
up to several weeks. The process for having a blocking restriction lifted can be
quite onerous with the particular requirements varying widely by country. In
addition, in certain countries, the block cannot be removed. As a result of the
ramifications of voting ballots in markets that allow share blocking, the
Adviser, on behalf of the Fund, reserves the right to abstain from voting
proxies in those markets.
Corporate
and Securities Laws. Securities
laws in emerging market countries are relatively new and unsettled and,
consequently, there is a risk of rapid and unpredictable change in laws
regarding foreign investment, securities regulation, title to securities and
securityholders rights. Accordingly, foreign investors may be adversely affected
by new or amended laws and regulations. In addition, the systems of corporate
governance to which emerging market issuers are subject may be less advanced
than those systems to which issuers located in more developed countries are
subject, and therefore, securityholders of issuers located in emerging market
countries may not receive many of the protections available to securityholders
of issuers located in more developed countries. In circumstances where adequate
laws and securityholders rights exist, it may not be possible to obtain swift
and equitable enforcement of the law. In addition, the enforcement of systems of
taxation at federal, regional and local levels in emerging market countries may
be inconsistent and subject to sudden change. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited.
ESG
Investing Strategy Risk.
The
Fund’s ESG strategy could cause it to perform differently compared to funds that
do not have an ESG focus. The Fund’s ESG strategy may result in the Fund
investing in securities or industry sectors that underperform other securities
or underperform the market as a whole. The Fund is also subject to the risk that
the companies represented in the Fund do not operate as expected when addressing
ESG issues. Additionally, the valuation model used for identifying ESG companies
may not perform as intended, which may adversely affect an investment in the
Fund. Regulatory changes or interpretations regarding the definitions and/or use
of ESG criteria could have a material adverse effect on the Fund’s ability to
implement its ESG strategy.
Foreign Currency Risk.
The Fund’s exposure to foreign currencies and changes in the value of foreign
currencies versus the U.S. dollar may result in reduced returns for the Fund,
and the value of certain foreign currencies may be subject to a high degree of
fluctuation. The Fund may also incur costs in connection with conversions
between U.S. dollars and foreign currencies.
Foreign
Securities Risk. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments. Foreign market trading
hours, clearance and settlement procedures, and holiday schedules may limit the
Fund's ability to buy and sell securities.
Global
Resources Sector Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the global resources sector. The Fund concentrates
its investments (i.e., invests 25% or more of its total assets) in the
securities of global resource companies and instruments that derive their value
from global resources. The Fund may be subject to greater risks and market
fluctuations than a fund whose portfolio has exposure to a broader range of
sectors. The Fund may be susceptible to financial, economic, political or market
events, as well as government regulation, impacting the global resources sectors
(such as the energy and metals sectors). Precious metals and natural resources
securities are at times volatile and there may be sharp fluctuations in prices,
even during periods of rising prices.
Market
Risk. The
prices of securities are subject to the risks associated with investing in the
securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Risk
of Investing in Other Funds. The
Fund may invest in shares of other funds, including ETFs. As a result, the Fund
will indirectly be exposed to the risks of an investment in the underlying
funds. As a shareholder in a fund, the Fund would bear its ratable share of that
entity’s expenses. At the same time, the Fund would continue to pay its own
investment management fees and other expenses. As a result, the Fund and its
shareholders will be absorbing additional levels of fees with respect to
investments in other funds, including ETFs.
Small-
and Medium-Capitalization Companies Risk.
The Fund may invest in small- and medium-capitalization companies and, therefore
will be subject to certain risks associated with small- and medium-
capitalization companies. These companies are often subject to less analyst
coverage and may be in early and less predictable periods of their corporate
existences, with little or no record of profitability. In addition, these
companies often have greater price volatility, lower trading volume and less
liquidity than larger more established companies. These companies tend to have
smaller revenues, narrower product lines, less management depth and experience,
smaller shares of their product or service markets, fewer financial resources
and less competitive strength than large-capitalization companies. Returns on
investments in securities of small- and medium-capitalization companies could
trail the returns on investments in securities of larger companies.
Special
Purpose Acquisition Companies Risk.
Equity
securities in which the Fund invests include stock, rights, warrants, and other
interests in special purpose acquisition companies (“SPACs”) or similar special
purpose entities. A SPAC is typically a publicly traded company that raises
investment capital via an initial public offering for the purpose of acquiring
one or more existing companies (or interests therein) via merger, combination,
acquisition or other similar transactions. If the Fund purchases shares of a
SPAC in an initial public offering it will generally bear a sales commission,
which may be significant. The shares of a SPAC are often issued in “units” that
include one share of common stock and one right or warrant (or partial right or
warrant) conveying the right to purchase additional shares or partial shares. In
some cases, the rights and warrants may be separated from the common stock at
the election of the holder, after which they may become freely tradeable. After
going public and until a transaction is completed, a SPAC generally invests the
proceeds of its initial public offering (less a portion retained to cover
expenses) in U.S. Government securities, money market securities and cash. To
the extent the SPAC is invested in cash or similar securities, this may impact
the Fund’s ability to meet its investment objective. If a SPAC does not complete
a transaction within a specified period of time after going public, the SPAC is
typically dissolved, at which point the invested funds are returned to the
SPAC’s shareholders (less certain permitted expenses) and any rights or warrants
issued by the SPAC expire worthless. SPACs generally provide their investors
with the option of redeeming an investment in the SPAC at or around the time of
effecting a transaction. In some cases, the Fund may forfeit its right to
receive additional warrants or other interests in the SPAC if it redeems its
interest in the SPAC in connection with a transaction. Because SPACs often do
not have an operating history or ongoing business other
than
seeking a transaction, the value of their securities may be particularly
dependent on the quality of its management and on the ability of the SPAC’s
management to identify and complete a profitable transaction. Some SPACs may
pursue transactions only within certain industries or regions, which may
increase the volatility of an investment in them. In addition, the securities
issued by a SPAC, which may be traded in the over-the-counter market, may become
illiquid and/or may be subject to restrictions on resale. Other risks of
investing in SPACs include that a significant portion of the monies raised by
the SPAC may be expended during the search for a target transaction; an
attractive transaction may not be identified at all (or any requisite approvals
may not be obtained) and the SPAC may be required to return any remaining monies
to shareholders; a transaction once identified or effected may prove
unsuccessful and an investment in the SPAC may lose value; the warrants or other
rights with respect to the SPAC held by the Fund may expire worthless or may be
repurchased or retired by the SPAC at an unfavorable price; and an investment in
a SPAC may be diluted by additional later offerings of interests in the SPAC or
by other investors exercising existing rights to purchase shares of the
SPAC.
Special
Risk Considerations of Investing in Canadian Issuers. Investments
in securities of Canadian issuers, including issuers located outside of Canada
that generate significant revenue from Canada, involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Canadian economy is very dependent on the demand for, and supply
and price of, natural resources. The Canadian market is relatively concentrated
in issuers involved in the production and distribution of natural resources.
There is a risk that any changes in natural resources sectors could have an
adverse impact on the Canadian economy. Additionally, the Canadian economy is
heavily dependent on relationships with certain key trading partners, including
the United States, countries in the European Union and China. Because the United
States is Canada’s largest trading partner and foreign investor, the Canadian
economy is dependent on and may be significantly affected by the U.S. economy.
Reduction in spending on Canadian products and services or changes in the U.S.
economy may adversely impact the Canadian economy. Trade agreements may further
increase Canada’s dependency on the U.S. economy, and uncertainty as to the
future of such trade agreements may cause a decline in the value of the Fund’s
Shares. Past periodic demands by the Province of Quebec for sovereignty have
significantly affected equity valuations and foreign currency movements in the
Canadian market and such demands may have this effect in the future. In
addition, certain sectors of Canada’s economy may be subject to foreign
ownership limitations. This may negatively impact the Fund’s ability to
invest in Canadian issuers and to pursue its investment
objective.
PERFORMANCE
The following
chart and table provide some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual total returns compare with those of a broad measure of
market performance and one or more other performance measures.
For instance, the S&P®
Global Natural Resources TR USD Index provides exposure to natural resources
across three primary commodity-related sectors: agribusiness, energy, and metals
and mining. MSCI AC World Daily TR Gross USD Index represents large- and mid-cap
companies across developed and emerging market countries. The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. The annual returns in the bar chart
are for the Fund’s Class A shares and do not reflect sales loads. If sales loads
were reflected, returns would be lower than those
shown.
Additionally, large purchases and/or
redemptions of shares of a class, relative to the amount of assets represented
by the class, may cause the annual returns for each class to differ. Updated
performance information for the Fund is available on the VanEck website at
vaneck.com.
CLASS A: Annual Total Returns (%) as of
12/31
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Best
Quarter: |
+33.29% |
2Q
2020 |
Worst
Quarter: |
-40.01% |
1Q
2020 |
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Average Annual Total Returns as of
12/31/2022 |
1
Year |
5
Years |
10
Years |
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Class
A Shares
(11/2/94) |
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Before Taxes |
1.54% |
2.43% |
-0.57% |
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After
Taxes on Distributions1 |
0.96% |
2.17% |
-0.71% |
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After Taxes on Distributions and Sale
of Fund Shares |
1.35% |
1.85% |
-0.44% |
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Class
C Shares
(11/2/94) |
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Before Taxes |
5.88% |
2.81% |
-0.78% |
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Class
I Shares
(5/1/06) |
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Before Taxes |
8.19% |
4.09% |
0.43% |
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Class
Y Shares
(4/30/10) |
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Before Taxes |
7.99% |
3.90% |
0.27% |
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S&P®
Global Natural Resources TR USD Index (reflects
no deduction for expenses or taxes)* |
10.32% |
7.34% |
4.89% |
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S&P®
North American Natural Resources Sector Index
(reflects no deduction for
fees, expenses or taxes) |
34.07% |
7.13% |
4.05% |
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MSCI
AC World Daily TR Gross USD Index
(reflects no deduction for
fees,
expenses or taxes) |
-17.96% |
5.75% |
8.54% |
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1
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
These returns are shown for
one class of shares only; after-tax returns for the other classes may
vary. Actual after-tax returns depend on your individual tax
situation and may differ from those shown in the preceding table. The after-tax return
information shown above does not apply to Fund shares held through a
tax-advantaged account, such as a 401(k) plan or Investment Retirement
Account.
*
Effective May 1, 2023, the
S&P Global Natural Resources TR USD Index replaced the S&P North
American Natural Resources Sector Index as the Fund’s primary benchmark. The
Fund changed its benchmark as it believes the S&P Global Natural Resources
TR USD Index is more representative of the global resources
sector.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation
Portfolio
Managers.
Shawn
Reynolds has been Portfolio Manager of the Fund since 2010. Charles T. Cameron
has been Deputy Portfolio Manager of the Fund since 2016 and a member of the
investment team since 1995. Mr. Cameron has also been an investment team member
on various funds managed by the Adviser since 1995.
PURCHASE
AND SALE OF FUND SHARES
In
general, shares of the Fund may be purchased or redeemed on any business day,
primarily through financial representatives such as brokers or advisers, or
directly by eligible investors through the Fund’s transfer agent. Purchase
minimums for Classes A, C and Y shares are $1,000 for an initial purchase and
$100 for a subsequent purchase, with no purchase minimums for any purchase
through a retirement or pension plan account, for any “wrap fee” account and
similar programs offered without a sales charge by certain financial
institutions and third-party recordkeepers and/or administrators, and for any
account using the Automatic Investment Plan, or for any other periodic purchase
program.
Purchase
minimums for Class I shares are $1 million for an initial purchase and no
minimum for a subsequent purchase; the initial minimum may be reduced or waived
at the Adviser’s discretion.
TAX
INFORMATION
The
Fund normally distributes net investment income and net realized capital gains,
if any, to shareholders annually. These distributions are generally taxable to
you as ordinary income or capital gains, unless you are investing through a tax
advantaged retirement account, such as a 401(k) plan or an individual retirement
account (IRA), in which case your distributions may be taxed as ordinary income
when withdrawn from such account.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a bank), the Fund and/or its affiliates may pay the intermediary for
the sale of Fund shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your financial professional to recommend the Fund over another investment. Ask
your financial professional or visit your financial intermediary’s website for
more information.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
The International Investors
Gold Fund seeks long-term capital appreciation by investing in common stocks of
gold-mining companies. The Fund may take current income into consideration when
choosing investments.
FUND FEES AND EXPENSES
This
table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund. You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
You may qualify for Class A sales charge
discounts if you and your family (includes spouse and children under age 21)
invest, or agree to invest in the future, at least $25,000, in the
aggregate, in Classes A and C of the VanEck
Funds. More information about these and other
discounts is available from your financial professional and in the “Shareholder
Information-Sales Charges” section of this prospectus, in the “Availability of
Discounts” section of the Fund’s SAI and, with respect to purchases of shares
through specific intermediaries, in Appendix A to this prospectus, entitled
“Intermediary Sales Charge Discounts and
Waivers.”
Shareholder
Fees
(fees
paid directly from your investment)
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Class
A |
Class
C |
Class
I |
Class
Y |
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Maximum
Sales Charge (load) imposed on purchases (as a percentage of offering
price) |
5.75% |
0.00% |
0.00% |
0.00% |
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Maximum
Deferred Sales Charge (load) (as a percentage of the lesser of the net
asset value or purchase price) |
0.00%¹ |
1.00% |
0.00% |
0.00% |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Class
A |
Class
C |
Class
I |
Class
Y |
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Management
Fees |
0.70% |
0.70% |
0.70% |
0.70% |
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Distribution
and/or Service (12b-1) Fees |
0.25% |
1.00% |
0.00% |
0.00% |
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Other
Expenses |
0.47% |
0.51% |
0.39% |
0.41% |
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Total
Annual Fund Operating Expenses |
1.42% |
2.21% |
1.09% |
1.11% |
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Fee
Waivers and/or Expense Reimbursements2 |
0.00% |
-0.01% |
-0.09% |
-0.01% |
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Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursements |
1.42% |
2.20% |
1.00% |
1.10% |
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1
A contingent deferred
sales charge for Class A shares of 1.00% for one year applies to redemptions of
qualified commissionable shares purchased at or above the $1 million breakpoint
level.
2
Van Eck Associates
Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to
the extent necessary to prevent the operating expenses of the Fund (excluding
acquired fund fees and expenses, interest expense, trading expenses, dividends
and interest payments on securities sold short, taxes and extraordinary
expenses) from exceeding 1.45% for Class A, 2.20% for Class C, 1.00% for Class
I, and 1.10% for Class Y of the Fund’s average daily net assets per year until
May 1,
2024. During such time, the expense limitation is expected to
continue until the Board of Trustees acts to discontinue all or a portion of
such expense limitation.
EXPENSE EXAMPLE
The following example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes that you invest $10,000
in the Fund for the time periods indicated and then either redeem all of your
shares at the end of these periods or continue to hold them. The example also
assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same, and applies fee waivers and/or expense
reimbursements, if any, for the periods indicated above under “Annual Fund
Operating Expenses.” Although your actual expenses may be higher or lower, based
on these assumptions, your costs would be:
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Share
Status |
1
Year |
3
Years |
5
Years |
10
Years |
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Class
A |
Sold
or Held |
$711 |
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$999 |
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$1,307 |
|
$2,179 |
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Class
C |
Sold |
$323 |
|
$690 |
|
$1,184 |
|
$2,543 |
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Held |
$223 |
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$690 |
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$1,184 |
|
$2,543 |
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Class
I |
Sold
or Held |
$102 |
|
$338 |
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$592 |
|
$1,321 |
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Class
Y |
Sold
or Held |
$112 |
|
$352 |
|
$611 |
|
$1,351 |
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PORTFOLIO
TURNOVER
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate that the Fund pays
higher transaction costs and may result in higher taxes when Fund shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the
most recent fiscal year, the Fund’s portfolio turnover rate was 39% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
Under normal conditions, the Fund
invests at least 80% of its net assets in securities of companies principally
engaged in gold-related activities, instruments that derive their value from
gold, gold coins and bullion. A company principally engaged in
gold-related activities is one that derives at least 50% of its revenues from
gold-related activities, including the exploration, mining or processing of or
dealing in gold. The Fund concentrates its investments in the gold-mining
industry and therefore invests 25% or more of its total assets in such industry.
The Fund is considered to be “non-diversified” which means that it may invest a
larger portion of its assets in a single issuer.
The
Fund invests in securities of companies with economic ties to countries
throughout the world, including the U.S. Under ordinary circumstances, the Fund
will invest in securities of issuers from a number of different countries, which
may include emerging market countries. The Fund may invest in non-U.S. dollar
denominated securities, which are subject to fluctuations in currency exchange
rates, and securities of companies of any capitalization range. The Fund
primarily invests in companies that the portfolio manager believes represent
value opportunities and/or that have growth potential within their market niche,
through their ability to increase production capacity at reasonable cost or make
gold discoveries around the world. The portfolio manager utilizes both a
macro-economic examination of gold market themes and a fundamental analysis of
prospective companies in the search for value and growth opportunities. The
analysis of financially material risks and opportunities related to ESG (i.e.
Environmental, Social and Governance) factors is a component of the overall
investment process. ESG considerations can affect the Adviser’s fundamental
assessment of a company or country.
The
Fund may invest up to 25% of its net assets, as of the date of the investment,
in gold and silver coins, gold, silver, platinum and palladium bullion and
exchange-traded funds (“ETFs”) that invest primarily in such coins and bullion
and derivatives on the foregoing. The Fund’s investments in coins and bullion
will not earn income, and the sole source of return to the Fund from these
investments will be from gains or losses realized on the sale of such
investments.
The
Fund may gain exposure to gold bullion and other metals by investing up to 25%
of the Fund’s total assets in a wholly owned subsidiary of the Fund (the
“Subsidiary”). The Subsidiary primarily invests in gold bullion, gold futures
and other instruments that provide direct or indirect exposure to gold,
including ETFs, and also may invest in silver, platinum and palladium bullion
and futures. The Subsidiary (unlike the Fund) may invest without limitation in
these investments. The Fund will “look-through” the Subsidiary to the
Subsidiary’s underlying investments for determining compliance with the Fund’s
investment policies. For tax reasons, it may be advantageous for the Fund to
create and maintain its exposure to the commodity markets, in whole or in part,
by investing in the Subsidiary. The portfolio of the Subsidiary is managed by
the Adviser for the exclusive benefit of the Fund.
The
Fund may use derivative instruments, such as structured notes, futures, options,
warrants, currency forwards and swap agreements, to gain or hedge exposure. The
Fund may invest up to 20% of its net assets in securities issued by other
investment companies, including ETFs. The Fund may also invest in money market
funds, but these investments are not subject to this limitation. The Fund may
invest in ETFs to participate in, or gain exposure to, certain market sectors,
or when direct investments in certain countries are not permitted or
available.
PRINCIPAL RISKS
There is no assurance that the
Fund will achieve its investment objective. The Fund’s share price and return will fluctuate with
changes in the market value of the Fund’s portfolio securities. Accordingly, an
investment in the Fund involves the risk of losing
money.
Active
Management Risk.
In managing the Fund’s portfolio, the Adviser will apply investment techniques
and risk analyses in making investment decisions for the Fund, but there can be
no guarantee that these will produce the desired results. Investment decisions
made by the Adviser in seeking to achieve the Fund’s investment objective may
cause a decline in the value of the investments held by the Fund and, in turn,
cause the Fund’s shares to lose value or underperform other funds with similar
investment objectives.
Commodities
and Commodity-Linked Derivatives Risk.
Exposure to the commodities markets, such as precious metals, industrial metals,
gas and other energy products and natural resources, may subject the Fund to
greater volatility than investments in traditional securities. The commodities
markets may fluctuate widely based on a variety of factors including changes in
overall market movements, political and economic events and policies, war,
disease, acts of terrorism, natural disasters, and changes in interest rates or
inflation rates. Because the value of a commodity-linked derivative instrument
and structured note typically are based upon the price movements of physical
commodities, the value of these securities will rise or fall in response to
changes in the underlying commodities or in the related investment index. The
tax treatment of commodity-linked derivative instruments may be adversely
affected by changes in legislation, regulations or other legally binding
authority. If, as a result of any such adverse action, the income of the Fund
from certain commodity-linked derivatives were treated as non-qualifying income,
the Fund may fail to qualify as a regulated investment company and/or be subject
to federal income tax at the Fund level. The uncertainty surrounding the
treatment of certain derivative instruments under the qualification tests for a
regulated investment company may limit the Fund’s use of such derivative
instruments.
Derivatives
Risk.
Derivatives
and other similar instruments (referred to collectively as “derivatives”) are
financial instruments whose values are based on the value of one or more
reference assets or indicators, such as a security, currency, interest rate, or
index. The Fund’s use of derivatives involves risks different from, and possibly
greater than, the risks associated with investing directly in securities and
other more traditional investments. Moreover, although the value of a derivative
is based on an underlying asset or indicator, a derivative typically does not
carry the same rights as would be the case if the Fund invested directly in the
underlying securities, currencies or other assets.
Derivatives
are subject to a number of risks, such as potential changes in value in response
to market developments or, in the case of “over-the-counter” derivatives, as a
result of a counterparty’s credit quality and the risk that a derivative
transaction may not have the effect the Adviser anticipated. Derivatives also
involve the risk of mispricing or improper valuation and the risk that changes
in the value of a derivative may not achieve the desired correlation with the
underlying asset or indicator. Derivative transactions can create investment
leverage and may be highly volatile, and the Fund could lose more than the
amount it invests. The use of derivatives may increase the amount and affect the
timing and character of taxes payable by shareholders of the Fund.
Many
derivative transactions are entered into “over-the-counter” without a central
clearinghouse; as a result, the value of such a derivative transaction will
depend on, among other factors, the ability and the willingness of the Fund’s
counterparty to perform its obligations under the transaction. If a counterparty
were to default on its obligations, the Fund’s contractual remedies against such
counterparty may be subject to bankruptcy and insolvency laws, which could
affect the Fund’s rights as a creditor (e.g.,
the Fund may not receive the net amount of payments that it is contractually
entitled to receive). Counterparty risk also refers to the related risks of
having concentrated exposure to such a counterparty. A liquid secondary market
may not always exist for the Fund’s derivative positions at any time, and the
Fund may not be able to initiate or liquidate a swap position at an advantageous
time or price, which may result in significant losses. The Fund may also face
the risk that it may not be able to meet margin and payment requirements and
maintain a derivatives position.
Derivatives
are also subject to operational and legal risks. Operational risk generally
refers to risk related to potential operational issues, including documentation
issues, settlement issues, system failures, inadequate controls, and human
errors. Legal risk generally refers to insufficient documentation, insufficient
capacity or authority of counterparty, or legality or enforceability of a
contract.
Direct
Investments Risk.
Direct investments may involve a high degree of business and financial risk that
can result in substantial losses. Because of the absence of any public trading
market for these investments, the Fund may take longer to liquidate these
positions than would be the case for publicly traded securities. Direct
investments are generally considered illiquid and will be aggregated with other
illiquid investments for purposes of the Fund's limitation on illiquid
investments.
Emerging
Market Issuers Risk.
Investments in securities of emerging market issuers involve risks not typically
associated with investments in securities of issuers in more developed countries
that may negatively affect the value of your investment in the Fund. Such
heightened risks may include, among others, expropriation and/or nationalization
of assets, restrictions on and government intervention in international trade,
confiscatory taxation, political instability, including authoritarian and/or
military involvement in governmental decision making, armed conflict, the impact
on the economy as a result of civil war, crime (including drug violence) and
social instability as a result of religious, ethnic and/or socioeconomic unrest.
Issuers in certain emerging market countries are subject to less stringent
requirements regarding accounting, auditing, financial reporting and record
keeping than are issuers in more developed markets, and therefore, all material
information may not be available or reliable. Emerging markets are also more
likely than developed markets to experience problems with the clearing and
settling of trades, as well as the holding of securities by local banks, agents
and depositories. Low trading volumes and volatile prices in less developed
markets may make trades harder to complete and settle, and governments or trade
groups may compel local agents to hold securities in designated
depositories
that may not be subject to independent evaluation. Local agents are held only to
the standards of care of their local markets. In general, the less developed a
country’s securities markets are, the greater the likelihood of custody
problems. Additionally, each of the factors described below could have a
negative impact on the Fund’s performance and increase the volatility of the
Fund.
Securities
Markets.
Securities markets in emerging market countries are underdeveloped and are often
considered to be less correlated to global economic cycles than those markets
located in more developed countries. Securities markets in emerging market
countries are subject to greater risks associated with market volatility, lower
market capitalization, lower trading volume, illiquidity, inflation, greater
price fluctuations, uncertainty regarding the existence of trading markets,
governmental control and heavy regulation of labor and industry. These factors,
coupled with restrictions on foreign investment and other factors, limit the
supply of securities available for investment by the Fund. This will affect the
rate at which the Fund is able to invest in emerging market countries, the
purchase and sale prices for such securities and the timing of purchases and
sales. Emerging markets can experience high rates of inflation, deflation and
currency devaluation. The prices of certain securities listed on securities
markets in emerging market countries have been subject to sharp fluctuations and
sudden declines, and no assurance can be given as to the future performance of
listed securities in general. Volatility of prices may be greater than in more
developed securities markets. Moreover, securities markets in emerging market
countries may be closed for extended periods of time or trading on securities
markets may be suspended altogether due to political or civil unrest. Market
volatility may also be heightened by the actions of a small number of investors.
Brokerage firms in emerging market countries may be fewer in number and less
established than brokerage firms in more developed markets. Since the Fund may
need to effect securities transactions through these brokerage firms, the Fund
is subject to the risk that these brokerage firms will not be able to fulfill
their obligations to the Fund. This risk is magnified to the extent the Fund
effects securities transactions through a single brokerage firm or a small
number of brokerage firms. In addition, the infrastructure for the safe custody
of securities and for purchasing and selling securities, settling trades,
collecting dividends, initiating corporate actions, and following corporate
activity is not as well developed in emerging market countries as is the case in
certain more developed markets.
Political
and Economic Risk.
Certain emerging market countries have historically been subject to political
instability and their prospects are tied to the continuation of economic and
political liberalization in the region. Instability may result from factors such
as government or military intervention in decision making, terrorism, civil
unrest, extremism or hostilities between neighboring countries. Any of these
factors, including an outbreak of hostilities could negatively impact the Fund’s
returns. Limited political and democratic freedoms in emerging market countries
might cause significant social unrest. These factors may have a significant
adverse effect on an emerging market country’s economy.
Many
emerging market countries may be heavily dependent upon international trade and,
consequently, may continue to be negatively affected by trade barriers, exchange
controls, managed adjustments in relative currency values and other
protectionist measures imposed or negotiated by the countries with which it
trades. They also have been, and may continue to be, adversely affected by
economic conditions in the countries with which they trade.
In
addition, commodities (such as oil, gas and minerals) represent a significant
percentage of certain emerging market countries’ exports and these economies are
particularly sensitive to fluctuations in commodity prices. Adverse economic
events in one country may have a significant adverse effect on other countries
of this region. In addition, most emerging market countries have experienced, at
one time or another, severe and persistent levels of inflation, including, in
some cases, hyperinflation. This has, in turn, led to high interest rates,
extreme measures by governments to keep inflation in check, and a generally
debilitating effect on economic growth.
Although
inflation in many countries has lessened, there is no guarantee it will remain
at lower levels. The political history of certain emerging market countries has
been characterized by political uncertainty, intervention by the military in
civilian and economic spheres, and political corruption. Such events could
reverse favorable trends toward market and economic reform, privatization, and
removal of trade barriers, and result in significant disruption in securities
markets in the region.
Also,
from time to time, certain issuers located in emerging market countries in which
the Fund invests may operate in, or have dealings with, countries subject to
sanctions and/or embargoes imposed by the U.S. Government and the United Nations
and/or countries identified by the U.S. Government as state sponsors of
terrorism. As a result, an issuer may sustain damage to its reputation if it is
identified as an issuer which operates in, or has dealings with, such countries.
The Fund, as an investor in such issuers, will be indirectly subject to those
risks.
The
economies of one or more countries in which the Fund may invest may be in
various states of transition from a planned economy to a more market oriented
economy. The economies of such countries differ from the economies of most
developed countries in many respects, including levels of government
involvement, states of development, growth rates, control of foreign exchange
and allocation of resources. Economic growth in these economies may be uneven
both geographically and among various sectors of their economies and may also be
accompanied by periods of high inflation. Political changes, social instability
and adverse diplomatic developments in these countries could result in the
imposition of additional government restrictions, including expropriation of
assets, confiscatory taxes or nationalization of
some
or all of the property held by the underlying issuers of securities of emerging
market issuers. There is no guarantee that the governments of these countries
will not revert back to some form of planned or non-market oriented economy, and
such governments continue to be active participants in many economic sectors
through ownership positions and regulation. The allocation of resources in such
countries is subject to a high level of government control. Such countries’
governments may strictly regulate the payment of foreign currency denominated
obligations and set monetary policy. Through their policies, these governments
may provide preferential treatment to particular industries or companies. The
policies set by the government of one of these countries could have a
substantial effect on that country’s economy.
Investment
and Repatriation Restrictions. The
government in an emerging market country may restrict or control to varying
degrees the ability of foreign investors to invest in securities of issuers
located or operating in such emerging market countries. These restrictions
and/or controls may at times limit or prevent foreign investment in securities
of issuers located or operating in emerging market countries and may inhibit the
Fund’s ability to meet its investment objective. In addition, the Fund may not
be able to buy or sell securities or receive full value for such securities.
Moreover, certain emerging market countries may require governmental approval or
special licenses prior to investments by foreign investors and may limit the
amount of investments by foreign investors in a particular industry and/or
issuer; may limit such foreign investment to a certain class of securities of an
issuer that may have less advantageous rights than the classes available for
purchase by domiciliaries of such emerging market countries; and/or may impose
additional taxes on foreign investors. A delay in obtaining a required
government approval or a license would delay investments in those emerging
market countries, and, as a result, the Fund may not be able to invest in
certain securities while approval is pending. The government of certain emerging
market countries may also withdraw or decline to renew a license that enables
the Fund to invest in such country. These factors make investing in issuers
located or operating in emerging market countries significantly riskier than
investing in issuers located or operating in more developed countries, and any
one of them could cause a decline in the net asset value of the
Fund.
Additionally,
investments in issuers located in certain emerging market countries may be
subject to a greater degree of risk associated with governmental approval in
connection with the repatriation of investment income, capital or the proceeds
of sales of securities by foreign investors. Moreover, there is the risk that if
the balance of payments in an emerging market country declines, the government
of such country may impose temporary restrictions on foreign capital
remittances. Consequently, the Fund could be adversely affected by delays in, or
a refusal to grant, required governmental approval for repatriation of capital,
as well as by the application to the Fund of any restrictions on investments.
Furthermore, investments in emerging market countries may require the Fund to
adopt special procedures, seek local government approvals or take other actions,
each of which may involve additional costs to the Fund.
Available
Disclosure About Emerging Market Issuers. Issuers
located or operating in emerging market countries are not subject to the same
rules and regulations as issuers located or operating in more developed
countries. Therefore, there may be less financial and other information publicly
available with regard to issuers located or operating in emerging market
countries and such issuers are not subject to the uniform accounting, auditing
and financial reporting standards applicable to issuers located or operating in
more developed countries.
Foreign
Currency Considerations. The
Fund’s assets that are invested in securities of issuers in emerging market
countries will generally be denominated in foreign currencies, and the proceeds
received by the Fund from these investments will be principally in foreign
currencies. The value of an emerging market country’s currency may be subject to
a high degree of fluctuation. This fluctuation may be due to changes in interest
rates, the effects of monetary policies issued by the United States, foreign
governments, central banks or supranational entities, the imposition of currency
controls or other national or global political or economic developments. The
economies of certain emerging market countries can be significantly affected by
currency devaluations. Certain emerging market countries may also have managed
currencies which are maintained at artificial levels relative to the U.S. dollar
rather than at levels determined by the market. This type of system can lead to
sudden and large adjustments in the currency which, in turn, can have a
disruptive and negative effect on foreign investors.
The
Fund’s exposure to an emerging market country’s currency and changes in value of
such foreign currencies versus the U.S. dollar may reduce the Fund’s investment
performance and the value of your investment in the Fund. Meanwhile, the Fund
will compute and expects to distribute its income in U.S. dollars, and the
computation of income will be made on the date that the income is earned by the
Fund at the foreign exchange rate in effect on that date. Therefore, if the
value of the respective emerging market country’s currency falls relative to the
U.S. dollar between the earning of the income and the time at which the Fund
converts the relevant emerging market country’s currency to U.S. dollars, the
Fund may be required to liquidate certain positions in order to make
distributions if the Fund has insufficient cash in U.S. dollars to meet
distribution requirements under the Internal Revenue Code. The liquidation of
investments, if required, could be at disadvantageous prices or otherwise have
an adverse impact on the Fund’s performance.
Certain
emerging market countries also restrict the free conversion of their currency
into foreign currencies, including the U.S. dollar. There is no significant
foreign exchange market for many such currencies and it would, as a result, be
difficult for the Fund to engage in foreign currency transactions designed to
protect the value of the Fund’s interests in securities
denominated
in such currencies. Furthermore, if permitted, the Fund may incur costs in
connection with conversions between U.S. dollars and an emerging market
country’s currency. Foreign exchange dealers realize a profit based on the
difference between the prices at which they are buying and selling various
currencies. Thus, a dealer normally will offer to sell a foreign currency to the
Fund at one rate, while offering a lesser rate of exchange should the Fund
desire immediately to resell that currency to the dealer. The Fund will conduct
its foreign currency exchange transactions either on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange market,
or through entering into forward, futures or options contracts to purchase or
sell foreign currencies.
Operational
and Settlement Risk.
In addition to having less developed securities markets, emerging market
countries have less developed custody and settlement practices than certain
developed countries. Rules adopted under the Investment Company Act of 1940
permit the Fund to maintain its foreign securities and cash in the custody of
certain eligible non-U.S. banks and securities depositories. Banks in emerging
market countries that are eligible foreign sub-custodians may be recently
organized or otherwise lack extensive operating experience. In addition, in
certain emerging market countries there may be legal restrictions or limitations
on the ability of the Fund to recover assets held in custody by a foreign
sub-custodian in the event of the bankruptcy of the sub-custodian. Because
settlement systems in emerging market countries may be less organized than in
other developed markets, there may be a risk that settlement may be delayed and
that cash or securities of the Fund may be in jeopardy because of failures of or
defects in the systems. Under the laws in many emerging market countries, the
Fund may be required to release local shares before receiving cash payment or
may be required to make cash payment prior to receiving local shares, creating a
risk that the Fund may surrender cash or securities without ever receiving
securities or cash from the other party. Settlement systems in emerging market
countries also have a higher risk of failed trades and back to back settlements
may not be possible.
The
Fund may not be able to convert a foreign currency to U.S. dollars in time for
the settlement of redemption requests. In the event that the Fund is not able to
convert the foreign currency to U.S. dollars in time for settlement, which may
occur as a result of the delays described above, the Fund may be required to
liquidate certain investments and/or borrow money in order to fund such
redemption. The liquidation of investments, if required, could be at
disadvantageous prices or otherwise have an adverse impact on the Fund’s
performance (e.g.,
by causing the Fund to overweight foreign currency denominated holdings and
underweight other holdings which were sold to fund redemptions). In addition,
the Fund will incur interest expense on any borrowings and the borrowings will
cause the Fund to be leveraged, which may magnify gains and losses on its
investments.
In
certain emerging market countries, the marketability of investments may be
limited due to the restricted opening hours of trading exchanges, and a
relatively high proportion of market value may be concentrated in the hands of a
relatively small number of investors. In addition, because certain emerging
market countries’ trading exchanges on which the Fund’s portfolio securities may
trade are open when the relevant exchanges are closed, the Fund may be subject
to heightened risk associated with market movements. Trading volume may be lower
on certain emerging market countries’ trading exchanges than on more developed
securities markets and securities may be generally less liquid. The
infrastructure for clearing, settlement and registration on the primary and
secondary markets of certain emerging market countries are less developed than
in certain other markets and under certain circumstances this may result in the
Fund experiencing delays in settling and/or registering transactions in the
markets in which it invests, particularly if the growth of foreign and domestic
investment in certain emerging market countries places an undue burden on such
investment infrastructure. Such delays could affect the speed with which the
Fund can transmit redemption proceeds and may inhibit the initiation and
realization of investment opportunities at optimum times.
Certain
issuers in emerging market countries may utilize share blocking schemes. Share
blocking refers to a practice, in certain foreign markets, where voting rights
related to an issuer’s securities are predicated on these securities being
blocked from trading at the custodian or sub-custodian level for a period of
time around a shareholder meeting. These restrictions have the effect of barring
the purchase and sale of certain voting securities within a specified number of
days before and, in certain instances, after a shareholder meeting where a vote
of shareholders will be taken. Share blocking may prevent the Fund from buying
or selling securities for a period of time. During the time that shares are
blocked, trades in such securities will not settle. The blocking period can last
up to several weeks. The process for having a blocking restriction lifted can be
quite onerous with the particular requirements varying widely by country. In
addition, in certain countries, the block cannot be removed. As a result of the
ramifications of voting ballots in markets that allow share blocking, the
Adviser, on behalf of the Fund, reserves the right to abstain from voting
proxies in those markets.
Corporate
and Securities Laws. Securities
laws in emerging market countries are relatively new and unsettled and,
consequently, there is a risk of rapid and unpredictable change in laws
regarding foreign investment, securities regulation, title to securities and
securityholders rights. Accordingly, foreign investors may be adversely affected
by new or amended laws and regulations. In addition, the systems of corporate
governance to which emerging market issuers are subject may be less advanced
than those systems to which issuers located in more developed countries are
subject, and therefore, securityholders of issuers located in emerging market
countries may not receive many of the protections available to securityholders
of issuers located in more developed countries. In circumstances where adequate
laws and securityholders rights exist, it may not be possible to obtain swift
and equitable enforcement of the law. In addition, the
enforcement
of systems of taxation at federal, regional and local levels in emerging market
countries may be inconsistent and subject to sudden change. The Fund has limited
rights and few practical remedies in emerging markets and the ability of U.S.
authorities to bring enforcement actions in emerging markets may be
limited.
ESG
Investing Strategy Risk. The
Fund’s ESG strategy could cause it to perform differently compared to funds that
do not have an ESG focus. The Fund’s ESG strategy may result in the Fund
investing in securities or industry sectors that underperform other securities
or underperform the market as a whole. The Fund is also subject to the risk that
the companies represented in the Fund do not operate as expected when addressing
ESG issues. Additionally, the valuation model used for identifying ESG companies
may not perform as intended, which may adversely affect an investment in the
Fund. Regulatory changes or interpretations regarding the definitions and/or use
of ESG criteria could have a material adverse effect on the Fund’s ability to
implement its ESG strategy.
Foreign Currency Risk.
The Fund’s exposure to foreign currencies and changes in the value of foreign
currencies versus the U.S. dollar may result in reduced returns for the Fund,
and the value of certain foreign currencies may be subject to a high degree of
fluctuation. The Fund may also incur costs in connection with conversions
between U.S. dollars and foreign currencies.
Foreign
Securities Risk.
Investments in the securities of foreign issuers involve risks beyond those
associated with investments in U.S. securities. These additional risks include
greater market volatility, the availability of less reliable financial
information, higher transactional and custody costs, taxation by foreign
governments, decreased market liquidity and political instability. Because
certain foreign securities markets may be limited in size, the activity of large
traders may have an undue influence on the prices of securities that trade in
such markets. The Fund invests in securities of issuers located in countries
whose economies are heavily dependent upon trading with key partners. Any
reduction in this trading may have an adverse impact on the Fund’s investments.
Foreign market trading hours, clearance and settlement procedures, and holiday
schedules may limit the Fund's ability to buy and sell securities.
Gold
and Silver Mining Companies Risk.
The Fund invests in stocks and depositary receipts of U.S. and foreign companies
that are involved in the gold mining and silver mining industries, which are
considered speculative and are affected by a variety of factors. Competitive
pressures may have a significant effect on the financial condition of gold
mining and silver mining companies. Also, gold and silver mining companies are
highly dependent on the price of gold bullion and silver bullion, respectively,
but may also be adversely affected by a variety of worldwide economic, financial
and political factors. The price of gold and silver may fluctuate substantially
over short periods of time so the Fund’s Share price may be more volatile than
other types of investments. Fluctuation in the prices of gold and silver may be
due to a number of factors, including changes in inflation, changes in currency
exchange rates and changes in industrial and commercial demand for metals
(including fabricator demand). Additionally, increased environmental or labor
costs may depress the value of metal investments.
Market
Risk.
The prices of securities are subject to the risks associated with investing in
the securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the Investment Company Act of 1940. The Fund is subject to the risk
that it will be more volatile than a diversified fund because the Fund may
invest a relatively high percentage of its assets in a smaller number of issuers
or may invest a larger proportion of its assets in a single issuer. Moreover,
the gains and losses on a single investment may have a greater impact on the
Fund’s net asset value and may make the Fund more volatile than more diversified
funds. The Fund may be particularly vulnerable to this risk if it is comprised
of a limited number of investments.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Regulatory
Risk.
Changes
in the laws or regulations of the United States or the Cayman Islands, including
any changes to applicable tax laws and regulations, could impair the ability of
the Fund to achieve its investment objective and could increase the operating
expenses of the Fund or the Subsidiary.
Risk
of Investing in Other Funds.
The Fund may invest in shares of other funds, including ETFs. As a result, the
Fund will indirectly be exposed to the risks of an investment in the underlying
funds. As a shareholder in a fund, the Fund would bear its ratable share of that
entity’s expenses. At the same time, the Fund would continue to pay its own
investment management fees and other expenses. As a result, the Fund and its
shareholders will be absorbing additional levels of fees with respect to
investments in other funds, including ETFs.
Small-
and Medium-Capitalization Companies Risk.
The
Fund may invest in small- and medium-capitalization companies and, therefore
will be subject to certain risks associated with small- and medium-
capitalization companies. These companies are often subject to less analyst
coverage and may be in early and less predictable periods of their corporate
existences, with little or
no
record of profitability. In addition, these companies often have greater price
volatility, lower trading volume and less liquidity than larger more established
companies. These companies tend to have smaller revenues, narrower product
lines, less management depth and experience, smaller shares of their product or
service markets, fewer financial resources and less competitive strength than
large-capitalization companies. Returns on investments in securities of small-
and medium-capitalization companies could trail the returns on investments in
securities of larger companies.
Special
Risk Considerations of Investing in Australian Issuers.
Investments in securities of Australian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Australian economy is heavily dependent on exports from the
agricultural and mining sectors. As a result, the Australian economy is
susceptible to fluctuations in the commodity markets. The Australian economy is
also dependent on trading with key trading partners.
Special
Risk Considerations of Investing in Canadian Issuers. Investments
in securities of Canadian issuers, including issuers located outside of Canada
that generate significant revenue from Canada, involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Canadian economy is very dependent on the demand for, and supply
and price of, natural resources. The Canadian market is relatively concentrated
in issuers involved in the production and distribution of natural resources.
There is a risk that any changes in natural resources sectors could have an
adverse impact on the Canadian economy. Additionally, the Canadian economy is
heavily dependent on relationships with certain key trading partners, including
the United States, countries in the European Union and China. Because the United
States is Canada’s largest trading partner and foreign investor, the Canadian
economy is dependent on and may be significantly affected by the U.S. economy.
Reduction in spending on Canadian products and services or changes in the U.S.
economy may adversely impact the Canadian economy. Trade agreements may further
increase Canada’s dependency on the U.S. economy, and uncertainty as to the
future of such trade agreements may cause a decline in the value of the Fund’s
Shares. Past periodic demands by the Province of Quebec for sovereignty have
significantly affected equity valuations and foreign currency movements in the
Canadian market and such demands may have this effect in the future. In
addition, certain sectors of Canada’s economy may be subject to foreign
ownership limitations. This may negatively impact the Fund’s ability to
invest in Canadian issuers and to pursue its investment objective.
Subsidiary
Investment Risk. Changes
in the laws of the United States and/or the Cayman Islands, under which the Fund
and the Subsidiary are organized, respectively, could result in the inability of
the Fund to operate as intended and could negatively affect the Fund and its
shareholders. The Subsidiary is not registered under the Investment Company Act
of 1940 and is not subject to the investor protections of the Investment Company
Act of 1940. Thus, the Fund, as an investor in the Subsidiary, will not have all
the protections offered to investors in registered investment
companies.
PERFORMANCE
The following
chart and table provide some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual total returns compare with those of a broad measure of
market performance and one or more other performance measures.
For instance, the NYSE Arca Gold Miners Index is a modified market
capitalization-weighted index comprised of publicly traded companies primarily
involved in the mining of gold and silver in locations around the world. MSCI AC
World Daily TR Gross USD Index represents large- and mid-cap companies across
developed and emerging market countries. The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. The annual returns in the bar chart
are for the Fund’s Class A shares and do not reflect sales loads. If sales loads
were reflected, returns would be lower than those
shown.
Additionally, large purchases and/or
redemptions of shares of a class, relative to the amount of assets represented
by the class, may cause the annual returns for each class to differ. Updated
performance information for the Fund is available on the VanEck website at
vaneck.com.
CLASS A: Annual Total Returns (%) as of
12/31
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Best
Quarter: |
+73.76% |
2Q
2020 |
Worst
Quarter: |
-33.43% |
2Q
2013 |
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Average Annual Total Returns as of
12/31/2022 |
1
Year |
5
Years |
10
Years |
|
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Class
A Shares
(2/10/56) |
|
|
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|
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Before Taxes |
-18.73% |
2.69% |
-3.30% |
|
|
|
After
Taxes on Distributions1 |
-18.73% |
0.79% |
-4.63% |
|
|
|
After Taxes on Distributions and Sale
of Fund Shares |
-11.09% |
1.41% |
-2.90% |
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|
Class
C Shares
(10/3/03) |
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|
|
Before Taxes |
-15.37% |
3.11% |
-3.46% |
|
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|
Class
I Shares
(10/2/06) |
|
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Before Taxes |
-13.50% |
4.30% |
-2.32% |
|
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Class
Y Shares
(4/30/10) |
|
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|
Before Taxes |
-13.55% |
4.22% |
-2.44% |
|
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|
NYSE
Arca Gold Miners Index
(reflects no deduction for
fees, expenses or taxes, except withholding
taxes) |
-8.63% |
5.68% |
-3.52% |
|
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|
MSCI
AC World Daily TR Gross USD Index
(reflects no deduction for fees, expenses or
taxes) |
-17.96% |
5.75% |
8.54% |
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1
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
These returns are shown for
one class of shares only; after-tax returns for the other classes may
vary. Actual after-tax returns depend on your individual tax
situation and may differ from those shown in the preceding table. The after-tax return
information shown above does not apply to Fund shares held through a
tax-advantaged account, such as a 401(k) plan or Investment Retirement
Account.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation
Portfolio
Manager.
Imaru
Casanova has been Portfolio Manager of the Fund since May 2023 and a member of
the investment team since 2011.
Additionally,
Joseph M. Foster, former Portfolio Manager of the Fund, serves as Gold
Strategist.
PURCHASE
AND SALE OF FUND SHARES
In
general, shares of the Fund may be purchased or redeemed on any business day,
primarily through financial representatives such as brokers or advisers, or
directly by eligible investors through the Fund’s transfer agent. Purchase
minimums for Classes A, C and Y shares are $1,000 for an initial purchase and
$100 for a subsequent purchase, with no purchase minimums for any purchase
through a retirement or pension plan account, for any “wrap fee” account and
similar programs offered without a sales charge by certain financial
institutions and third-party recordkeepers and/or administrators, and for any
account using the Automatic Investment Plan, or for any other periodic purchase
program.
Purchase
minimums for Class I shares are $1 million for an initial purchase and no
minimum for a subsequent purchase; the initial minimum may be reduced or waived
at the Adviser’s discretion.
TAX
INFORMATION
The
Fund normally distributes net investment income and net realized capital gains,
if any, to shareholders annually. These distributions are generally taxable to
you as ordinary income or capital gains, unless you are investing through a tax
advantaged retirement account, such as a 401(k) plan or an individual retirement
account (IRA), in which case your distributions may be taxed as ordinary income
when withdrawn from such account.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a bank), the Fund and/or its affiliates may pay the intermediary for
the sale of Fund shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your financial professional to recommend the Fund over another investment. Ask
your financial professional or visit your financial intermediary’s website for
more information.
This
section states each Fund’s investment objective and describes certain strategies
and policies that the Fund may utilize in pursuit of its investment objective.
This section also provides additional information about the principal risks
associated with investing in each Fund.
Fund Emerging
Markets Fund
Objective The
Emerging Markets Fund seeks long-term capital appreciation by investing
primarily in equity securities in emerging markets around the
world.
Fund Emerging
Markets Leaders Fund
Objective The
Emerging Markets Leaders Fund seeks long-term capital appreciation by investing
primarily in equity securities in emerging markets around the
world.
Fund Environmental
Sustainability Fund
Objective The
Environmental Sustainability Fund seeks long-term capital appreciation by
investing primarily in equity securities of companies operating in environmental
sustainability markets.
Fund Global
Resources Fund
Objective The
Global Resources Fund seeks long-term capital appreciation by investing
primarily in global resource securities. Income is a secondary
consideration.
Fund International
Investors Gold Fund
Objective The
International Investors Gold Fund seeks long-term capital appreciation by
investing in common stocks of gold-mining companies. The Fund may take current
income into consideration when choosing investments.
Each
of the Emerging Markets Fund, Global Resources Fund and International Investors
Gold Fund's investment objective is fundamental and may only be changed with
shareholder approval.
Each
of the Emerging Markets Leaders Fund and Environmental Sustainability Fund's
investment objective is non-fundamental and may be changed by the Board of
Trustees without shareholder approval. To the extent practicable, the Fund will
provide shareholders with 60 days’ prior written notice before changing its
investment objective.
The
following section provides additional information regarding the principal risks
identified under “Principal Risks of Investing in the Fund” in each Fund’s
“Summary Information” section and additional risks, including non-principal
risks, if applicable. The risks checked in the chart below apply to each Fund as
indicated. For a description of the risks listed in the chart, please see
"Glossary – Investment Risks" below the chart. See also the Funds' Statement of
Additional Information for information on certain other investments in which
each Fund may invest and other investment techniques in which each Fund may
engage from time to time and related risks.
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Risk |
|
Emerging
Markets Fund |
Emerging
Markets Leaders Fund |
Environmental
Sustainability Fund |
Global
Resources Fund |
International
Investors Gold Fund |
|
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|
√
Principal Risk | X Additional Non-Principal Risk |
|
Active
Management Risk |
|
√ |
√ |
√ |
√ |
√ |
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|
Commodities
and Commodity-Linked Derivatives Risk |
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|
√ |
√ |
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Consumer
Discretionary Sector Risk |
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√ |
√ |
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|
Depositary
Receipts Risk |
|
|
√ |
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|
Derivatives
Risk |
|
X |
X |
√ |
√ |
√ |
|
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|
Direct
Investments Risk |
|
√ |
√ |
X |
√ |
√ |
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|
Emerging
Market Issuers Risk |
|
√ |
√ |
√ |
√ |
√ |
|
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Risk |
|
Emerging
Markets Fund |
Emerging
Markets Leaders Fund |
Environmental
Sustainability Fund |
Global
Resources Fund |
International
Investors Gold Fund |
|
|
|
|
√
Principal Risk | X Additional Non-Principal Risk |
|
Environmental-Related
Securities Risk |
|
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|
√ |
|
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|
Equity
Securities Risk |
|
√ |
√ |
√ |
√ |
√ |
|
|
|
|
ESG
Investing Strategy Risk |
|
√ |
√ |
X |
√ |
√ |
|
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|
Financials
Sector Risk |
|
√ |
√ |
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|
Foreign
Currency Risk |
|
√ |
√ |
√ |
√ |
√ |
|
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|
Foreign
Securities Risk |
|
√ |
√ |
√ |
√ |
√ |
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Global
Resources Sector Risk |
|
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|
√ |
X |
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|
Gold
and Silver Mining Companies Risk |
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√ |
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Industrials
Sector Risk |
|
√ |
√ |
√ |
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Information
Technology Sector Risk |
|
√ |
√ |
√ |
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|
Large-Capitalization
Companies Risk |
|
√ |
√ |
√ |
√ |
√ |
|
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|
Leverage
Risk |
|
X |
X |
X |
X |
X |
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|
Market
Risk |
|
√ |
√ |
√ |
√ |
√ |
|
|
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|
Medium-Capitalization
Companies Risk |
|
√ |
√ |
√ |
√ |
√ |
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|
Non-Diversified
Risk |
|
|
√ |
√ |
|
√ |
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|
Operational
Risk |
|
√ |
√ |
√ |
√ |
√ |
|
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Regulatory
Risk |
|
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√ |
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|
Restricted
Securities Risk |
|
√ |
√ |
X |
X |
X |
|
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|
Risk
of Investing in Other Funds |
|
√ |
√ |
√ |
√ |
√ |
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Small-
and Medium-Capitalization Companies Risk |
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Special
Purpose Acquisition Companies Risk |
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√ |
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X |
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Special
Risk Considerations of Investing in Australian Issuers |
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Special
Risk Considerations of Investing in Canadian Issuers |
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Special
Risk Considerations of Investing in Chinese Issuers |
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Risk |
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Emerging
Markets Fund |
Emerging
Markets Leaders Fund |
Environmental
Sustainability Fund |
Global
Resources Fund |
International
Investors Gold Fund |
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√
Principal Risk | X Additional Non-Principal Risk |
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Special
Risk Considerations of Investing in Indian Issuers |
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Special
Risk Considerations of Investing in Latin American Issuers |
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Stock
Connect Risk |
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Subsidiary
Investment Risk |
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Sustainability
Investing Strategy Risk |
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Utilities
Sector Risk |
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GLOSSARY
- INVESTMENT RISKS
Active
Management Risk.
In managing the Fund’s portfolio, the Adviser will apply investment techniques
and risk analyses in making investment decisions for the Fund, but there can be
no guarantee that these will produce the desired results. Investment decisions
made by the Adviser in seeking to achieve the Fund’s investment objective may
cause a decline in the value of the investments held by the Fund and, in turn,
cause the Fund’s shares to lose value or underperform other funds with similar
investment objectives.
Commodities
and Commodity-Linked Derivatives Risk. Commodities
include precious metals (such as gold, silver, platinum and palladium in the
form of bullion and coins), industrial metals, gas and other energy products and
natural resources. The value of a commodity-linked derivative investment
generally is based upon the price movements of a physical commodity (such as
energy, mineral, or agricultural products), a commodity futures contract or
commodity index, or other economic variable based upon changes in the value of
commodities or the commodities markets. The Fund may seek exposure to the
commodity markets through investments in leveraged or unleveraged
commodity-linked or index-linked notes, which are derivative debt instruments
with principal and/or coupon payments linked to the value of commodities,
commodity futures contracts or the performance of commodity indices. These notes
are sometimes referred to as “structured notes” because the terms of these notes
may be structured by the issuer and the purchaser of the note.
Exposure
to the commodities markets may subject the Fund to greater volatility than
investments in traditional securities. The commodities markets may fluctuate
widely based on a variety of factors including changes in overall market
movements, political and economic events and policies, war, disease, acts of
terrorism, natural disasters, and changes in interest rates or inflation rates.
Prices of various commodities may also be affected by factors such as drought,
floods, weather, embargoes, tariffs and other regulatory developments. The
prices of commodities can also fluctuate widely due to supply and demand
disruptions in major producing or consuming regions. Certain commodities may be
produced in a limited number of countries and may be controlled by a small
number of producers. As a result, political, economic and supply related events
in such countries could have a disproportionate impact on the prices of such
commodities.
Commodity-Linked
“Structured” Securities Risk. Because
the value of a commodity-linked derivative instrument typically is based upon
the price movements of a physical commodity, the value of the commodity-linked
derivative instrument may be affected by changes in overall market movements,
commodity index volatility, changes in interest rates, or factors affecting a
particular industry. The value of these securities will rise or fall in response
to changes in the underlying commodity or in the related investment
index.
Structured
Notes Risk. Structured
notes expose the Fund economically to movements in commodity prices. The
performance of a structured note is determined by the price movement of the
commodity underlying the note. A highly liquid secondary market may not exist
for structured notes, and there can be no assurance that one will develop. These
notes are often leveraged, increasing the volatility of each note’s market value
relative to changes in the underlying commodity, commodity futures contract or
commodity index.
Tax
Risk.
The tax treatment of commodity-linked derivative instruments may be adversely
affected by changes in legislation, regulations or other legally binding
authority. If, as a result of any such adverse action, the income of the Fund
from
certain commodity-linked derivatives was treated as non-qualifying income, the
Fund might fail to qualify as a regulated investment company and/or be subject
to federal income tax at the Fund level. As a regulated investment company, the
Fund must derive at least 90% of its gross income for each taxable year from
sources treated as qualifying income under the Internal Revenue Code of 1986, as
amended (the “Code”), including income from any financial instrument or position
that constitutes a security under section 2(a)(36) of the Investment Company Act
of 1940. In September 2016 the Internal Revenue Service (“IRS”) announced that
it will no longer issue private letter rulings on questions relating to the
treatment of a corporation as a regulated investment company that require a
determination of whether a financial instrument or position is a security under
section 2(a)(36) of the Investment Company Act of 1940. The IRS also revoked
rulings issued to some funds regarding the treatment of commodity-linked notes
held directly by such funds. The uncertainty surrounding the treatment of
certain derivative instruments under the qualification tests for a regulated
investment company may limit the Fund’s use of such derivative instruments. The
Fund also may incur transaction and other costs to comply with any new or
additional guidance from the IRS.
Consumer Discretionary Sector
Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the consumer discretionary sector. The
consumer discretionary sector comprises companies whose
businesses are sensitive to economic cycles, such as manufacturers of high-end
apparel and automobile and leisure companies. Companies in
the consumer discretionary sector are subject to
fluctuations in supply and demand. These companies may also be adversely
affected by changes in consumer spending as a result of world events, political
and economic conditions, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.
Depositary Receipts
Risk. The
Fund may invest in depositary receipts (including American Depositary Receipts),
which involve similar risks to those associated with investments in foreign
securities. Depositary receipts are receipts listed on U.S. or foreign exchanges
issued by banks or trust companies that entitle the holder to all dividends and
capital gains that are paid out on the underlying foreign shares. The issuers of
certain depositary receipts are under no obligation to distribute shareholder
communications to the holders of such receipts, or to pass through to them any
voting rights with respect to the deposited securities. Investments in
depositary receipts may be less liquid than the underlying shares in their
primary trading market. The issuers of depositary receipts may discontinue
issuing new depositary receipts and withdraw existing depositary receipts at any
time, which may result in costs and delays in the distribution of the underlying
assets to the Fund and may negatively impact the Fund’s
performance.
Derivatives
Risk. Derivatives
and other similar instruments (referred to collectively as “derivatives”) are
financial instruments whose values are based on the value of one or more
reference assets or indicators, such as a security, currency, interest rate, or
index. The Fund’s use of derivatives involves risks different from, and possibly
greater than, the risks associated with investing directly in securities and
other more traditional investments. Moreover, although the value of a derivative
is based on an underlying asset or indicator, a derivative typically does not
carry the same rights as would be the case if the Fund invested directly in the
underlying securities, currencies or other assets.
Derivatives
are subject to a number of risks, such as potential changes in value in response
to market developments or, in the case of “over-the-counter” derivatives, as a
result of a counterparty’s credit quality and the risk that a derivative
transaction may not have the effect the Adviser anticipated. Derivatives also
involve the risk of mispricing or improper valuation and the risk that changes
in the value of a derivative may not achieve the desired correlation with the
underlying asset or indicator. Derivative transactions can create investment
leverage and may be highly volatile, and the Fund could lose more than the
amount it invests. The use of derivatives may increase the amount and affect the
timing and character of taxes payable by shareholders of the Fund.
Many
derivative transactions are entered into “over-the-counter” without a central
clearinghouse; as a result, the value of such a derivative transaction will
depend on, among other factors, the ability and the willingness of the Fund’s
counterparty to perform its obligations under the transaction. If a counterparty
were to default on its obligations, the Fund’s contractual remedies against such
counterparty may be subject to bankruptcy and insolvency laws, which could
affect the Fund’s rights as a creditor (e.g.,
the Fund may not receive the net amount of payments that it is contractually
entitled to receive). Counterparty risk also refers to the related risks of
having concentrated exposure to such a counterparty. A liquid secondary market
may not always exist for the Fund’s derivative positions at any time, and the
Fund may not be able to initiate or liquidate a swap position at an advantageous
time or price, which may result in significant losses. The Fund may also face
the risk that it may not be able to meet margin and payment requirements and
maintain a derivatives position.
Derivatives
are also subject to operational and legal risks. Operational risk generally
refers to risk related to potential operational issues, including documentation
issues, settlement issues, system failures, inadequate controls, and human
errors. Legal risk generally refers to insufficient documentation, insufficient
capacity or authority of counterparty, or legality or enforceability of a
contract.
Direct
Investments Risk.
Direct investments are investments made directly with an enterprise not through
publicly traded shares or interests. The Fund will not invest more than 10% of
its total assets in direct investments. Direct investments may involve a high
degree of business and financial risk that can result in substantial losses.
Because of the absence of any public trading market for these investments, the
Fund may take longer to liquidate these positions than would be the case for
publicly traded securities.
Although
these securities may be resold in privately negotiated transactions, the prices
on these sales could be less than those originally paid by the Fund. Issuers
whose securities are not publicly traded may not be subject to public disclosure
and other investor protection requirements applicable to publicly traded
securities. Direct investments are generally considered illiquid and will be
aggregated with other illiquid investments for purposes of the limitation on
illiquid investments.
Emerging
Market Issuers Risk.
Investments in securities of emerging market issuers involve risks not typically
associated with investments in securities of issuers in more developed countries
that may negatively affect the value of your investment in the Fund. Such
heightened risks may include, among others, expropriation and/or nationalization
of assets, restrictions on and government intervention in international trade,
confiscatory taxation, political instability, including authoritarian and/or
military involvement in governmental decision making, armed conflict, the impact
on the economy as a result of civil war, crime (including drug violence) and
social instability as a result of religious, ethnic and/or socioeconomic unrest.
Issuers in certain emerging market countries are subject to less stringent
requirements regarding accounting, auditing, financial reporting and record
keeping than are issuers in more developed markets, and therefore, all material
information may not be available or reliable. Emerging markets are also more
likely than developed markets to experience problems with the clearing and
settling of trades, as well as the holding of securities by local banks, agents
and depositories. Low trading volumes and volatile prices in less developed
markets may make trades harder to complete and settle, and governments or trade
groups may compel local agents to hold securities in designated depositories
that may not be subject to independent evaluation. Local agents are held only to
the standards of care of their local markets. In general, the less developed a
country’s securities markets are, the greater the likelihood of custody
problems. Additionally, each of the factors described below could have a
negative impact on the Fund’s performance and increase the volatility of the
Fund.
Securities
Markets. Securities
markets in emerging market countries are underdeveloped and are often considered
to be less correlated to global economic cycles than those markets located in
more developed countries. Securities markets in emerging market countries are
subject to greater risks associated with market volatility, lower market
capitalization, lower trading volume, illiquidity, inflation, greater price
fluctuations, uncertainty regarding the existence of trading markets,
governmental control and heavy regulation of labor and industry. These factors,
coupled with restrictions on foreign investment and other factors, limit the
supply of securities available for investment by the Fund. This will affect the
rate at which the Fund is able to invest in emerging market countries, the
purchase and sale prices for such securities and the timing of purchases and
sales. Emerging markets can experience high rates of inflation, deflation and
currency devaluation. The prices of certain securities listed on securities
markets in emerging market countries have been subject to sharp fluctuations and
sudden declines, and no assurance can be given as to the future performance of
listed securities in general. Volatility of prices may be greater than in more
developed securities markets. Moreover, securities markets in emerging market
countries may be closed for extended periods of time or trading on securities
markets may be suspended altogether due to political or civil unrest. Market
volatility may also be heightened by the actions of a small number of investors.
Brokerage firms in emerging market countries may be fewer in number and less
established than brokerage firms in more developed markets. Since the Fund may
need to effect securities transactions through these brokerage firms, the Fund
is subject to the risk that these brokerage firms will not be able to fulfill
their obligations to the Fund. This risk is magnified to the extent the Fund
effects securities transactions through a single brokerage firm or a small
number of brokerage firms. In addition, the infrastructure for the safe custody
of securities and for purchasing and selling securities, settling trades,
collecting dividends, initiating corporate actions, and following corporate
activity is not as well developed in emerging market countries as is the case in
certain more developed markets.
Political
and Economic Risk. Certain
emerging market countries have historically been subject to political
instability and their prospects are tied to the continuation of economic and
political liberalization in the region. Instability may result from factors such
as government or military intervention in decision making, terrorism, civil
unrest, extremism or hostilities between neighboring countries. Any of these
factors, including an outbreak of hostilities could negatively impact the Fund’s
returns. Limited political and democratic freedoms in emerging market countries
might cause significant social unrest. These factors may have a significant
adverse effect on an emerging market country’s economy.
Many
emerging market countries may be heavily dependent upon international trade and,
consequently, may continue to be negatively affected by trade barriers, exchange
controls, managed adjustments in relative currency values and other
protectionist measures imposed or negotiated by the countries with which it
trades. They also have been, and may continue to be, adversely affected by
economic conditions in the countries with which they trade.
In
addition, commodities (such as oil, gas and minerals) represent a significant
percentage of certain emerging market countries’ exports and these economies are
particularly sensitive to fluctuations in commodity prices. Adverse economic
events in one country may have a significant adverse effect on other countries
of this region. In addition, most emerging market countries have experienced, at
one time or another, severe and persistent levels of inflation, including, in
some cases, hyperinflation. This has, in turn, led to high interest rates,
extreme measures by governments to keep inflation in check, and a generally
debilitating effect on economic growth.
Although
inflation in many countries has lessened, there is no guarantee it will remain
at lower levels. The political history of certain emerging market countries has
been characterized by political uncertainty, intervention by the military in
civilian
and
economic spheres, and political corruption. Such events could reverse favorable
trends toward market and economic reform, privatization, and removal of trade
barriers, and result in significant disruption in securities markets in the
region.
Also,
from time to time, certain issuers located in emerging market countries in which
the Fund invests may operate in, or have dealings with, countries subject to
sanctions and/or embargoes imposed by the U.S. Government and the United Nations
and/or countries identified by the U.S. Government as state sponsors of
terrorism. As a result, an issuer may sustain damage to its reputation if it is
identified as an issuer which operates in, or has dealings with, such countries.
The Fund, as an investor in such issuers, will be indirectly subject to those
risks.
The
economies of one or more countries in which the Fund may invest may be in
various states of transition from a planned economy to a more market oriented
economy. The economies of such countries differ from the economies of most
developed countries in many respects, including levels of government
involvement, states of development, growth rates, control of foreign exchange
and allocation of resources. Economic growth in these economies may be uneven
both geographically and among various sectors of their economies and may also be
accompanied by periods of high inflation. Political changes, social instability
and adverse diplomatic developments in these countries could result in the
imposition of additional government restrictions, including expropriation of
assets, confiscatory taxes or nationalization of some or all of the property
held by the underlying issuers of securities of emerging market issuers. There
is no guarantee that the governments of these countries will not revert back to
some form of planned or non-market oriented economy, and such governments
continue to be active participants in many economic sectors through ownership
positions and regulation. The allocation of resources in such countries is
subject to a high level of government control. Such countries’ governments may
strictly regulate the payment of foreign currency denominated obligations and
set monetary policy. Through their policies, these governments may provide
preferential treatment to particular industries or companies. The policies set
by the government of one of these countries could have a substantial effect on
that country’s economy.
Investment
and Repatriation Restrictions. The
government in an emerging market country may restrict or control to varying
degrees the ability of foreign investors to invest in securities of issuers
located or operating in such emerging market countries. These restrictions
and/or controls may at times limit or prevent foreign investment in securities
of issuers located or operating in emerging market countries and may inhibit the
Fund’s ability to meet its investment objective. In addition, the Fund may not
be able to buy or sell securities or receive full value for such securities.
Moreover, certain emerging market countries may require governmental approval or
special licenses prior to investments by foreign investors and may limit the
amount of investments by foreign investors in a particular industry and/or
issuer; may limit such foreign investment to a certain class of securities of an
issuer that may have less advantageous rights than the classes available for
purchase by domiciliaries of such emerging market countries; and/or may impose
additional taxes on foreign investors. A delay in obtaining a required
government approval or a license would delay investments in those emerging
market countries, and, as a result, the Fund may not be able to invest in
certain securities while approval is pending. The government of certain emerging
market countries may also withdraw or decline to renew a license that enables
the Fund to invest in such country. These factors make investing in issuers
located or operating in emerging market countries significantly riskier than
investing in issuers located or operating in more developed countries, and any
one of them could cause a decline in the net asset value of the
Fund.
Additionally,
investments in issuers located in certain emerging market countries may be
subject to a greater degree of risk associated with governmental approval in
connection with the repatriation of investment income, capital or the proceeds
of sales of securities by foreign investors. Moreover, there is the risk that if
the balance of payments in an emerging market country declines, the government
of such country may impose temporary restrictions on foreign capital
remittances. Consequently, the Fund could be adversely affected by delays in, or
a refusal to grant, required governmental approval for repatriation of capital,
as well as by the application to the Fund of any restrictions on investments.
Furthermore, investments in emerging market countries may require the Fund to
adopt special procedures, seek local government approvals or take other actions,
each of which may involve additional costs to the Fund.
Available
Disclosure About Emerging Market Issuers. Issuers
located or operating in emerging market countries are not subject to the same
rules and regulations as issuers located or operating in more developed
countries. Therefore, there may be less financial and other information publicly
available with regard to issuers located or operating in emerging market
countries and such issuers are not subject to the uniform accounting, auditing
and financial reporting standards applicable to issuers located or operating in
more developed countries.
Foreign
Currency Considerations. The
Fund’s assets that are invested in securities of issuers in emerging market
countries will generally be denominated in foreign currencies, and the proceeds
received by the Fund from these investments will be principally in foreign
currencies. The value of an emerging market country’s currency may be subject to
a high degree of fluctuation. This fluctuation may be due to changes in interest
rates, the effects of monetary policies issued by the United States, foreign
governments, central banks or supranational entities, the imposition of currency
controls or other national or global political or economic developments. The
economies of certain emerging market countries can be significantly affected by
currency devaluations. Certain emerging market countries may also have
managed
currencies which are maintained at artificial levels relative to the U.S. dollar
rather than at levels determined by the market. This type of system can lead to
sudden and large adjustments in the currency which, in turn, can have a
disruptive and negative effect on foreign investors.
The
Fund’s exposure to an emerging market country’s currency and changes in value of
such foreign currencies versus the U.S. dollar may reduce the Fund’s investment
performance and the value of your investment in the Fund. Meanwhile, the Fund
will compute and expects to distribute its income in U.S. dollars, and the
computation of income will be made on the date that the income is earned by the
Fund at the foreign exchange rate in effect on that date. Therefore, if the
value of the respective emerging market country’s currency falls relative to the
U.S. dollar between the earning of the income and the time at which the Fund
converts the relevant emerging market country’s currency to U.S. dollars, the
Fund may be required to liquidate certain positions in order to make
distributions if the Fund has insufficient cash in U.S. dollars to meet
distribution requirements under the Internal Revenue Code. The liquidation of
investments, if required, could be at disadvantageous prices or otherwise have
an adverse impact on the Fund’s performance.
Certain
emerging market countries also restrict the free conversion of their currency
into foreign currencies, including the U.S. dollar. There is no significant
foreign exchange market for many such currencies and it would, as a result, be
difficult for the Fund to engage in foreign currency transactions designed to
protect the value of the Fund’s interests in securities denominated in such
currencies. Furthermore, if permitted, the Fund may incur costs in connection
with conversions between U.S. dollars and an emerging market country’s currency.
Foreign exchange dealers realize a profit based on the difference between the
prices at which they are buying and selling various currencies. Thus, a dealer
normally will offer to sell a foreign currency to the Fund at one rate, while
offering a lesser rate of exchange should the Fund desire immediately to resell
that currency to the dealer. The Fund will conduct its foreign currency exchange
transactions either on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange market,
or through entering into forward, futures or options contracts to purchase or
sell foreign currencies.
Operational
and Settlement Risk. In
addition to having less developed securities markets, emerging market countries
have less developed custody and settlement practices than certain developed
countries. Rules adopted under the Investment Company Act of 1940 permit the
Fund to maintain its foreign securities and cash in the custody of certain
eligible non-U.S. banks and securities depositories. Banks in emerging market
countries that are eligible foreign sub-custodians may be recently organized or
otherwise lack extensive operating experience. In addition, in certain emerging
market countries there may be legal restrictions or limitations on the ability
of the Fund to recover assets held in custody by a foreign sub-custodian in the
event of the bankruptcy of the sub-custodian. Because settlement systems in
emerging market countries may be less organized than in other developed markets,
there may be a risk that settlement may be delayed and that cash or securities
of the Fund may be in jeopardy because of failures of or defects in the systems.
Under the laws in many emerging market countries, the Fund may be required to
release local shares before receiving cash payment or may be required to make
cash payment prior to receiving local shares, creating a risk that the Fund may
surrender cash or securities without ever receiving securities or cash from the
other party. Settlement systems in emerging market countries also have a higher
risk of failed trades and back to back settlements may not be
possible.
The
Fund may not be able to convert a foreign currency to U.S. dollars in time for
the settlement of redemption requests. In the event that the Fund is not able to
convert the foreign currency to U.S. dollars in time for settlement, which may
occur as a result of the delays described above, the Fund may be required to
liquidate certain investments and/or borrow money in order to fund such
redemption. The liquidation of investments, if required, could be at
disadvantageous prices or otherwise have an adverse impact on the Fund’s
performance (e.g.,
by causing the Fund to overweight foreign currency denominated holdings and
underweight other holdings which were sold to fund redemptions). In addition,
the Fund will incur interest expense on any borrowings and the borrowings will
cause the Fund to be leveraged, which may magnify gains and losses on its
investments.
In
certain emerging market countries, the marketability of investments may be
limited due to the restricted opening hours of trading exchanges, and a
relatively high proportion of market value may be concentrated in the hands of a
relatively small number of investors. In addition, because certain emerging
market countries’ trading exchanges on which the Fund’s portfolio securities may
trade are open when the relevant exchanges are closed, the Fund may be subject
to heightened risk associated with market movements. Trading volume may be lower
on certain emerging market countries’ trading exchanges than on more developed
securities markets and securities may be generally less liquid. The
infrastructure for clearing, settlement and registration on the primary and
secondary markets of certain emerging market countries are less developed than
in certain other markets and under certain circumstances this may result in the
Fund experiencing delays in settling and/or registering transactions in the
markets in which it invests, particularly if the growth of foreign and domestic
investment in certain emerging market countries places an undue burden on such
investment infrastructure. Such delays could affect the speed with which the
Fund can transmit redemption proceeds and may inhibit the initiation and
realization of investment opportunities at optimum times.
Certain
issuers in emerging market countries may utilize share blocking schemes. Share
blocking refers to a practice, in certain foreign markets, where voting rights
related to an issuer’s securities are predicated on these securities being
blocked
from trading at the custodian or sub-custodian level for a period of time around
a shareholder meeting. These restrictions have the effect of barring the
purchase and sale of certain voting securities within a specified number of days
before and, in certain instances, after a shareholder meeting where a vote of
shareholders will be taken. Share blocking may prevent the Fund from buying or
selling securities for a period of time. During the time that shares are
blocked, trades in such securities will not settle. The blocking period can last
up to several weeks. The process for having a blocking restriction lifted can be
quite onerous with the particular requirements varying widely by country. In
addition, in certain countries, the block cannot be removed. As a result of the
ramifications of voting ballots in markets that allow share blocking, the
Adviser, on behalf of the Fund, reserves the right to abstain from voting
proxies in those markets.
Corporate
and Securities Laws. Securities
laws in emerging market countries are relatively new and unsettled and,
consequently, there is a risk of rapid and unpredictable change in laws
regarding foreign investment, securities regulation, title to securities and
securityholders rights. Accordingly, foreign investors may be adversely affected
by new or amended laws and regulations. In addition, the systems of corporate
governance to which emerging market issuers are subject may be less advanced
than those systems to which issuers located in more developed countries are
subject, and therefore, securityholders of issuers located in emerging market
countries may not receive many of the protections available to securityholders
of issuers located in more developed countries. In circumstances where adequate
laws and securityholders rights exist, it may not be possible to obtain swift
and equitable enforcement of the law. In addition, the enforcement of systems of
taxation at federal, regional and local levels in emerging market countries may
be inconsistent and subject to sudden change. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited.
Environmental-Related
Securities Risk. Companies
that promote positive environmental policies may not perform as well as
companies that do not pursue such goals. Issuers engaged in environmentally
beneficial business lines may be difficult to identify and investments in them
maybe volatile. They may be highly dependent upon government subsidies,
contracts with government entities, and the successful development of new and
proprietary technologies. Such technologies risk rapid product obsolescence,
short product cycles, and competition from new market entrants. Current
valuation methods used to value companies involved in alternative, clean water,
and clean power technology sectors, for example, may not have been in widespread
use for a significant period of time, and it may be difficult to value share
prices of such issuers. In addition, seasonal weather conditions, fluctuations
in supply of and demand for clean energy products (including, in relation to
traditional energy products, such as oil and gas), changes in energy prices, and
international political events may cause fluctuations in the performance of
these issuers and the prices of their securities. Environmentally-focused
investing is qualitative and subjective by nature, and there is no guarantee
that the factors utilized by the Adviser or any judgment exercised by the
Adviser will reflect the opinions of any particular investor. Information
regarding responsible practices is obtained through voluntary or third-party
reporting, which may not be accurate or complete, and the Adviser is dependent
on such information to evaluate a company’s commitment to, or implementation of,
responsible practices.
Equity Securities Risk. The
value of the equity securities held by the Fund may fall due to general market
and economic conditions, perceptions regarding the markets in which the issuers
of securities held by the Fund participate, or factors relating to specific
issuers in which the Fund invests. For example, an adverse event, such as an
unfavorable earnings report, may result in a decline in the value of equity
securities of an issuer held by the Fund; the price of the equity securities of
an issuer may be particularly sensitive to general movements in the securities
markets; or a drop in the securities markets may depress the price of most or
all of the equities securities held by the Fund. In addition, the equity
securities of an issuer in the Fund’s portfolio may decline in price if the
issuer fails to make anticipated dividend payments. Equity securities are
subordinated to preferred securities and debt in a company’s capital structure
with respect to priority to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns.
ESG
Investing Strategy Risk.
The Fund’s ESG strategy could cause it to perform differently compared to funds
that do not have an ESG focus. The Fund’s ESG strategy may result in the Fund
investing in securities or industry sectors that underperform other securities
or underperform the market as a whole. The Fund is also subject to the risk that
the companies represented in the Fund do not operate as expected when addressing
ESG issues. Additionally, the valuation model used for identifying ESG companies
may not perform as intended, which may adversely affect an investment in the
Fund. Regulatory changes or interpretations regarding the definitions and/or use
of ESG criteria could have a material adverse effect on the Fund’s ability to
implement its ESG strategy.
Financials
Sector Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the financials sector. Companies in the financials
sector may be subject to extensive government regulation that affects the scope
of their activities, the prices they can charge and the amount of capital they
must maintain. The profitability of companies in the financials sector may be
adversely affected by increases in interest rates, by loan losses, which usually
increase in economic downturns, and by credit rating downgrades. In addition,
the financials sector is undergoing numerous changes, including continuing
consolidations, development of new products and structures and changes to its
regulatory framework. Furthermore, some companies in the financials sector
perceived as benefiting from government intervention in the past may be
subject
to future government-imposed restrictions on their businesses or face increased
government involvement in their operations. Increased government involvement in
the financials sector, including measures such as taking ownership positions in
financial institutions, could result in a dilution of the Fund’s investments in
financial institutions.
Foreign Currency Risk.
The
Fund’s exposure to foreign currencies and changes in the value of foreign
currencies versus the U.S. dollar may result in reduced returns for the Fund,
and the value of certain foreign currencies may be subject to a high degree of
fluctuation. The Fund may also incur costs in connection with conversions
between U.S. dollars and foreign currencies.
Several
factors may affect the price of euros and the British pound sterling, including
the debt level and trade deficit of the Economic and Monetary Union and the
United Kingdom, inflation and interest rates of the Economic and Monetary Union
and the United Kingdom and investors’ expectations concerning inflation and
interest rates and global or regional political, economic or financial events
and situations. The European financial markets have experienced, and may
continue to experience, volatility and have been adversely affected by concerns
about economic downturns, credit rating downgrades, rising government debt
levels and possible default on or restructuring of government debt in several
European countries. These events have adversely affected, and may in the future
affect, the value and exchange rate of the euro and may continue to
significantly affect the economies of every country in Europe, including
European Union member countries that do not use the euro and non-European Union
member countries. Notwithstanding the EU-UK Trade and Cooperation Agreement,
following the United Kingdom’s withdrawal from the European Union and the
subsequent transition period, there is likely to be considerable uncertainty as
to the United Kingdom’s post-transition framework. Significant uncertainty
exists regarding the effects such withdrawal will have on the euro, European
economies and the global markets. In addition, one or more countries may abandon
the euro and the impact of these actions, especially if conducted in a
disorderly manner, may have significant and far-reaching consequences on the
euro.
The
value of certain emerging market countries’ currencies may be subject to a high
degree of fluctuation. This fluctuation may be due to changes in interest rates,
investors’ expectations concerning inflation and interest rates, the emerging
market country’s debt levels and trade deficit, the effects of monetary policies
issued by the United States, foreign governments, central banks or supranational
entities, the imposition of currency controls or other national or global
political or economic developments. For example, certain emerging market
countries have experienced economic challenges and liquidity issues with respect
to their currency. The economies of certain emerging market countries can be
significantly affected by currency devaluations. Certain emerging market
countries may also have managed currencies which are maintained at artificial
levels relative to the U.S. dollar rather than at levels determined by the
market. This type of system could lead to sudden and large adjustments in the
currency, which in turn, may have a negative effect on the Fund and its
investments.
Foreign
Securities Risk. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments. Foreign market trading
hours, clearance and settlement procedures, and holiday schedules may limit the
Fund's ability to buy and sell securities.
Certain
foreign markets that have historically been considered relatively stable may
become volatile in response to changed conditions or new developments. Increased
interconnectivity of world economies and financial markets increases the
possibility that adverse developments and conditions in one country or region
will affect the stability of economies and financial markets in other countries
or regions. Because the Fund may invest in securities denominated in foreign
currencies and some of the income received by the Fund may be in foreign
currencies, changes in currency exchange rates may negatively impact the Fund’s
return.
Foreign
issuers are often subject to less stringent requirements regarding accounting,
auditing, financial reporting and record keeping than are U.S. issuers, and
therefore, not all material information may be available or reliable. Securities
exchanges or foreign governments may adopt rules or regulations that may
negatively impact the Fund’s ability to invest in foreign securities or may
prevent the Fund from repatriating its investments. The Fund may also invest in
depositary receipts which involve similar risks to those associated with
investments in foreign securities. In addition, the Fund may not receive
shareholder communications or be permitted to vote the securities that it holds,
as the issuers may be under no legal obligation to distribute shareholder
communications.
Certain
foreign markets may rely heavily on particular industries or foreign capital and
are more vulnerable to diplomatic developments, the imposition of economic
sanctions against a particular country or countries, organizations, entities
and/or individuals, changes in international trade patterns, trade barriers, and
other protectionist or retaliatory measures. The United States and other nations
or international organizations may impose economic sanctions or take other
actions that may adversely affect issuers of specific countries. Economic
sanctions could, among other things, effectively restrict or eliminate the
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make the Fund’s investments in such
securities harder to value. These sanctions, any future sanctions or other
actions, or even the threat of further sanctions or other actions, may
negatively affect the value and liquidity of the Fund.
Also,
certain issuers located in foreign countries in which the Fund invests may
operate in, or have dealings with, countries subject to sanctions and/or
embargoes imposed by the U.S. Government and the United Nations and/or countries
identified by the U.S. Government as state sponsors of terrorism. As a result,
an issuer may sustain damage to its reputation if it is identified as an issuer
which operates in, or has dealings with, such countries. The Fund, as an
investor in such issuers, will be indirectly subject to those
risks.
Global
Resources Sector Risk. The
Fund may be sensitive to, and its performance may depend to a greater extent on,
the overall condition of the global resources sector. The Fund concentrates its
investments (i.e., invests 25% or more of its total assets) in the securities of
global resource companies and instruments that derive their value from global
resources. Global resources include precious metals (including gold), base and
industrial metals, energy, natural resources, and other commodities. Investments
in global resources companies can be significantly affected by events relating
to this industry, including international political and economic developments,
embargoes, tariffs, inflation, weather and natural disasters, livestock
diseases, limits on exploration, rapid changes in the supply of and demand for
natural resources 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 other operating companies. Companies engaged
in global resources may be adversely affected by changes in government policies
and regulations, technological advances and/or obsolescence, environmental
damage claims, energy conservation efforts, the success of exploration projects,
limitations on the liquidity of certain natural resources and commodities and
competition from new market entrants. Political risks and the other risks to
which foreign securities are subject may also affect domestic global resource
companies if they have significant operations or investments in foreign
countries. Changes in general economic conditions, including commodity price
volatility, changes in exchange rates, imposition of import controls, rising
interest rates, prices of raw materials and other commodities, depletion of
resources and labor relations, could adversely affect the Fund’s portfolio
companies. The highly cyclical nature of the global resources sector may affect
the earnings or operating cash flows of global resources companies.
The
Fund may be subject to greater risks and market fluctuations than a fund whose
portfolio has exposure to a broader range of sectors. The Fund may be
susceptible to financial, economic, political or market events, as well as
government regulation (including environmental regulation), impacting the global
resources sectors. Specifically, the energy sector can be affected by changes in
the prices of and supplies of oil and other energy fuels, energy conservation,
the success of exploration projects, the risks generally associated with the
extraction of natural resources, such as the risks of mining and drilling, and
tax and other government regulations. The metals sector can be affected by sharp
price volatility over short periods caused by global economic, financial and
political factors, resource availability, government regulation, economic
cycles, changes in inflation, interest rates, currency fluctuations, metal sales
by governments, central banks or international agencies, investment speculation
and fluctuations in industrial and commercial supply and demand. Precious metals
and natural resources securities are at times volatile and there may be sharp
fluctuations in prices, even during periods of rising prices. Additionally,
companies engaged in the production and distribution of global resources may be
adversely affected by changes in world events, political and economic
conditions, energy conservation, environmental policies, commodity price
volatility, changes in exchange rates, imposition of import controls, increased
competition, depletion of resources and labor relations.
Gold
and Silver Mining Companies Risk. The
Fund invests in stocks and depositary receipts of U.S. and foreign companies
that are involved in the gold mining and silver mining industries, which are
considered speculative and are affected by a variety of factors. Competitive
pressures may have a significant effect on the financial condition of gold
mining and silver mining companies. Also, gold and silver mining companies are
highly dependent on the price of gold bullion and silver bullion, respectively,
but may also be adversely affected by a variety of worldwide economic, financial
and political factors. The price of gold and silver may fluctuate substantially
over short periods of time so the Fund’s Share price may be more volatile than
other types of investments. Fluctuation in the prices of gold and silver may be
due to a number of factors, including changes in inflation, changes in currency
exchange rates and changes in industrial and commercial demand for metals
(including fabricator demand). Additionally, increased environmental or labor
costs may depress the value of metal investments.
The
securities of gold or silver mining companies may under- or over-perform
commodities themselves over the short-term or long-term. Gold bullion and silver
bullion prices may fluctuate substantially over short periods of time, even
during periods of rising prices, so the Fund’s Share price may be more volatile
than other types of investments. To the extent the Fund invests in gold bullion,
such investments may incur higher storage and custody costs as compared to
purchasing, holding and selling more traditional investments. A drop in the
price of gold and/or silver bullion would particularly adversely affect the
profitability of small- and medium- capitalization mining companies and their
ability to secure financing. Mining operations have varying expected life spans,
and companies that have mines with short expected life spans may experience more
stock price volatility. A significant number of the companies in the Fund may be
early stage mining companies that are in the exploration stage only or that hold
properties that might not ultimately produce gold or silver. The exploration and
development of mineral deposits involve significant financial risks over a
significant period of time which even a combination of careful evaluation,
experience and knowledge may not eliminate. Few properties which are explored
are ultimately developed into producing mines. Major expenditures may be
required to establish reserves by drilling and to construct mining and
processing facilities at a site. In addition, many early stage miners operate at
a loss and are dependent on securing equity and/or debt financing, which might
be more difficult to secure for an early
stage
mining company than for a more established counterpart. Furthermore, companies
that are only in the exploration stage are typically unable to adopt specific
strategies for controlling the impact of the price of gold or
silver.
The
prices of gold and precious metals operation companies are affected by the price
of gold or other precious metals such as platinum, palladium and silver, as well
as other prevailing market conditions. These prices may be volatile, fluctuating
substantially over short periods of time. The prices of precious metals may also
be influenced by macroeconomic conditions, including confidence in the global
monetary system and the relative strength of various currencies, as well as
demand in the industrial and jewelry sectors. In times of significant inflation
or great economic uncertainty, gold, silver and other precious metals may
outperform traditional investments such as bonds and stocks. However, in times
of stable economic growth, traditional equity and debt investments could offer
greater appreciation potential and the value of gold, silver and other precious
metals may be adversely affected, which could in turn affect the Fund’s returns.
Gold-related investments as a group have not performed as well as the stock
market in general during periods when the U.S. dollar is strong, inflation is
low and general economic conditions are stable. Additionally, returns on
gold-related investments have traditionally been more volatile than investments
in broader equity or debt markets. In addition, some gold and precious metals
mining companies have hedged, to varying degrees, their exposure to decreases in
the prices of gold or precious metals by selling forward future production,
which could limit the company’s benefit from future rises in the prices of gold
or precious metals or increase the risk that the company could fail to meet its
contractual obligations.
A
significant portion of the world’s gold reserves are held by governments,
central banks and related institutions. The production, purchase and sale of
precious metals by governments or central banks or other larger holders can be
negatively affected by various economic, financial, social and political
factors, which may be unpredictable and may have a significant adverse impact on
the supply and prices of precious metals.
The
principal supplies of metal industries also may be concentrated in a small
number of countries and regions, the governments of which may pass laws or
regulations limiting metal investments for strategic or other policy reasons.
Economic, social and political conditions in those countries that are the
largest producers of gold and silver may have a direct negative effect on the
production and marketing of gold and silver and on sales of central bank gold
holdings. Some gold, silver and precious metals mining operation companies may
hedge their exposure to declines in gold, silver and precious metals prices by
selling forward future production, which may result in lower returns during
periods when the prices of gold, silver and precious metals
increase.
The
gold, silver and precious metals industries can be significantly adversely
affected by events relating to international political developments, the success
of exploration projects, commodity prices, tax and government regulations and
intervention (including government restrictions on private ownership of gold and
mining land), changes in inflation or expectations regarding inflation in
various countries and investment speculation. If a natural disaster or other
event with a significant economic impact occurs in a region where the companies
in which the Fund invests operate, such disaster or event could negatively
affect the profitability of such companies and, in turn, the Fund’s investment
in them. Gold and silver mining companies may also be significantly adversely
affected by import controls, worldwide competition, environmental hazards,
liability for environmental damage, depletion of resources, industrial
accidents, underground fires, seismic activity, labor disputes, unexpected
geological formations, availability of appropriately skilled persons,
unanticipated ground and water conditions and mandated expenditures for safety
and pollution control devices.
Industrials
Sector Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the industrials sector. The industrials sector
comprises companies who produce capital goods used in construction and
manufacturing, such as companies that make and sell machinery, equipment and
supplies that are used to produce other goods. Companies in the industrials
sector may be adversely affected by changes in government regulation, world
events and economic conditions. In addition, companies in the industrials sector
be adversely affected by environmental damages, product liability claims and
exchange rates.
The
stock prices of companies in the industrials sector are affected by supply and
demand both for their specific product or service and for industrial sector
products in general. The products of manufacturing companies may face product
obsolescence due to rapid technological developments and frequent new product
introduction. In addition, the industrials sector may also be adversely affected
by changes or trends in commodity prices, which may be influenced or
characterized by unpredictable factors.
Information
Technology Sector Risk.
The Fund may be sensitive to, and its performance may depend to a greater extent
on, the overall condition of the information technology sector. Information
technology companies face intense competition, both domestically and
internationally, which may have an adverse effect on profit margins. Information
technology companies may have limited product lines, markets, financial
resources or personnel. The products of information technology companies may
face product obsolescence due to rapid technological developments and frequent
new product introduction, unpredictable changes in growth rates and competition
for the services of qualified personnel. Companies in the information technology
sector are heavily dependent on patent protection and the expiration of patents
may adversely affect the profitability of these companies.
Large-Capitalization
Companies Risk. Securities
of large-capitalization companies (generally companies with market
capitalization greater than $10 billion) could fall out of favor with the market
and underperform securities of small- or medium-
capitalization
companies. Larger, more established companies may be slow to respond to
challenges and may grow more slowly than smaller companies.
Leverage
Risk.
To the extent that the Fund borrows money or utilizes certain derivatives, it
may be leveraged. Leveraging generally exaggerates the effect on net asset value
of any increase or decrease in the market value of the Fund’s portfolio
securities. The Fund is required to comply with the derivatives rule when it
engages in transactions that create future Fund payment or delivery obligations.
The Fund is required to comply with the asset coverage requirements under the
Investment Company Act of 1940 when it engages in borrowings and/or transactions
treated as borrowings.
Market
Risk.
The prices of securities are subject to the risks associated with investing in
the securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Medium-Capitalization
Companies Risk. The
Fund may invest in medium-capitalization companies and, therefore will be
subject to certain risks associated with medium- capitalization companies. These
companies are often subject to less analyst coverage and may be in early and
less predictable periods of their corporate existences, with little or no record
of profitability. In addition, these companies often have greater price
volatility, lower trading volume and less liquidity than larger more established
companies. These companies tend to have smaller revenues, narrower product
lines, less management depth and experience, smaller shares of their product or
service markets, fewer financial resources and less competitive strength than
large-capitalization companies. Returns on investments in securities of
medium-capitalization companies could trail the returns on investments in
securities of larger companies.
Non-Diversified
Risk. The
Fund is classified as a “non-diversified” fund under the Investment Company Act
of 1940. The Fund is subject to the risk that it will be more volatile than a
diversified fund because the Fund may invest a relatively high percentage of its
assets in a smaller number of issuers or may invest a larger proportion of its
assets in a single issuer. Moreover, the gains and losses on a single investment
may have a greater impact on the Fund’s net asset value and may make the Fund
more volatile than more diversified funds. The Fund may be particularly
vulnerable to this risk if it is comprised of a limited number of
investments.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Regulatory
Risk. The
Fund and the Subsidiary are subject to the laws and regulated by the governments
of the United States and/or the Cayman Islands, respectively. Changes in the
laws or regulations of the United States or the Cayman Islands, including any
changes to applicable tax laws and regulations, could impair the ability of the
Fund to achieve its investment objective and could increase the operating
expenses of the Fund or the Subsidiary.
Investment
in the Subsidiary is expected to provide the Fund with exposure to the
commodities markets within the limitations of the federal income tax
requirements of Subchapter M of the Code. Subchapter M requires, among other
things, that at least 90% of the Fund’s gross income be derived from securities
or derived with respect to its business of investing in securities (typically
referred to as “qualifying income”). Historically, in many cases a fund
intending to utilize a subsidiary for commodities investments would apply to the
IRS to obtain a private letter ruling that income from the fund’s investment in
a subsidiary would constitute qualifying income for purposes of Subchapter M.
However, in March 2019, the IRS issued final regulations permitting regulated
investment companies to treat income from investments such as the Fund’s
Subsidiary as qualifying income for purposes of Subchapter M even if the
Subsidiary does not make a distribution of that income such that funds no longer
need to rely upon private letter rulings. Accordingly, the Fund expects to
invest its assets in the Subsidiary, consistent with applicable law and the
advice of counsel, in a manner that should permit the Fund to treat income
allocable from the Subsidiary as qualifying income. Should the IRS take action
that adversely affects the tax treatment of the Fund’s use of the Subsidiary, it
could limit the Fund’s ability to pursue its investment objective as described.
The Fund also may incur transaction and other costs to comply with any new or
additional guidance from the IRS.
Restricted
Securities Risk.
Regulation S securities and Rule 144A securities are restricted securities that
are not registered under the Securities Act of 1933. They may be less liquid and
more difficult to value than other investments because such securities may not
be readily marketable. The Fund may not be able to purchase or sell a restricted
security promptly or at a reasonable time or price. Although there may be a
substantial institutional market for these securities, it is not possible to
predict exactly how the market for such securities will develop or whether it
will continue to exist. A restricted security that was liquid at the time of
purchase may subsequently become illiquid and its value may decline as a result.
Restricted securities that are deemed illiquid will count towards the Fund’s
limitation on illiquid securities. In addition, transaction costs may be higher
for restricted securities than for more liquid securities. The Fund may have to
bear the expense of registering restricted securities for resale and the risk of
substantial delays in effecting the registration.
Risk
of Investing in Other Funds.
The Fund may invest in shares of other funds, including ETFs. As a result, the
Fund will indirectly be exposed to the risks of an investment in the underlying
funds. Shares of other funds have many of the same risks as direct investments
in common stocks or bonds. In addition, the market value of such funds’ shares
is expected to rise and fall as the value of the underlying securities rise and
fall. If the shares of such funds are traded on a secondary market, the market
value of such funds’ shares may differ from the net asset value of the
particular fund. As a shareholder in a fund, the Fund will bear its ratable
share of the underlying fund’s expenses. At the same time, the Fund will
continue to pay its own investment management fees and other expenses. As a
result, the Fund and its shareholders will be absorbing duplicate levels of fees
with respect to investments in other funds, including ETFs. The expenses of such
underlying funds will not, however, be counted towards the Fund’s expense cap.
The Fund is subject to the conditions set forth in provisions of the Investment
Company Act of 1940 that limit the amount that the Fund and its affiliates, in
the aggregate, can invest in the outstanding voting securities of any one
investment company.
Small-
and Medium-Capitalization Companies Risk.
The Fund may invest in small- and medium-capitalization companies and, therefore
will be subject to certain risks associated with small- and medium-
capitalization companies. These companies are often subject to less analyst
coverage and may be in early and less predictable periods of their corporate
existences, with little or no record of profitability. In addition, these
companies often have greater price volatility, lower trading volume and less
liquidity than larger more established companies. These companies tend to have
smaller revenues, narrower product lines, less management depth and experience,
smaller shares of their product or service markets, fewer financial resources
and less competitive strength than large-capitalization companies. Returns on
investments in securities of small- and medium-capitalization companies could
trail the returns on investments in securities of larger companies.
Special
Purpose Acquisition Companies Risk. Equity
securities in which the Fund invests include stock, rights, warrants, and other
interests in special purpose acquisition companies (“SPACs”) or similar special
purpose entities. A SPAC is typically a publicly traded company that raises
investment capital via an initial public offering for the purpose of acquiring
one or more existing companies (or interests therein) via merger, combination,
acquisition or other similar transactions. If the Fund purchases shares of a
SPAC in an initial public offering it will generally bear a sales commission,
which may be significant. The shares of a SPAC are often issued in “units” that
include one share of common stock and one right or warrant (or partial right or
warrant) conveying the right to purchase additional shares or partial shares. In
some cases, the rights and warrants may be separated from the common stock at
the election of the holder, after which they may become freely tradeable. After
going public and until a transaction is completed, a SPAC generally invests the
proceeds of its initial public offering (less a portion retained to cover
expenses) in U.S. Government securities, money market securities and cash. To
the extent the SPAC is invested in cash or similar securities, this may impact
the Fund’s ability to meet its investment objective. If a SPAC does not complete
a transaction within a specified period of time after going public, the SPAC is
typically dissolved, at which point the invested funds are returned to the
SPAC’s shareholders (less certain permitted expenses) and any rights or warrants
issued by the SPAC expire worthless. SPACs generally provide their investors
with the option of redeeming an investment in the SPAC at or around the time of
effecting a transaction. In some cases, the Fund may forfeit its right to
receive additional warrants or other interests in the SPAC if it redeems its
interest in the SPAC in connection with a transaction. Because SPACs often do
not have an operating history or ongoing business other than seeking a
transaction, the value of their securities may be particularly dependent on the
quality of its management and on the ability of the SPAC’s management to
identify and complete a profitable transaction. Some SPACs may pursue
transactions only within certain industries or regions, which may increase the
volatility of an investment in them. In addition, the securities issued by a
SPAC, which may be traded in the over-the-counter market, may become illiquid
and/or may be subject to restrictions on resale. Other risks of investing in
SPACs include that a significant portion of the monies raised by the SPAC may be
expended during the search for a target transaction; an attractive transaction
may not be identified at all (or any requisite approvals may not be obtained)
and the SPAC may be required to return any remaining monies to shareholders; a
transaction once identified or effected may prove unsuccessful and an investment
in the SPAC may lose value; the warrants or other rights with respect to the
SPAC held by the Fund may expire worthless or may be repurchased or retired by
the SPAC at an unfavorable price; and an investment in a SPAC may be diluted by
additional later offerings of interests in the SPAC or by other investors
exercising existing rights to purchase shares of the SPAC.
Special
Risk Considerations of Investing in Australian Issuers. Investments
in securities of Australian issuers, including issuers located outside of
Australia that generate significant revenues from Australia, involve risks
and special considerations not typically associated with investments in the U.S.
securities markets. Investments in Australian issuers may subject the Fund to
regulatory, political, currency, security, and economic risk specific to
Australia. The Australian economy is heavily dependent on exports from the
agricultural and mining sectors. As a result, the Australian economy is
susceptible to fluctuations in the commodity markets. The Australian economy is
also becoming increasingly dependent on its growing services industry. The
Australian economy is dependent on trading with key trading partners, including
the United States, China, Japan, Singapore and certain European countries.
Reduction in spending on Australian products and services, or changes in any of
the economies, may cause an adverse impact on the Australian
economy.
Additionally,
Australia is located in a part of the world that has historically been prone to
natural disasters, such as hurricanes, droughts and bushfires, and is
economically sensitive to environmental events. Any such event may adversely
impact the Australian economy, causing an adverse impact on the value of the
Fund.
Special
Risk Considerations of Investing in Canadian Issuers. Investments
in securities of Canadian issuers, including issuers located outside of Canada
that generate significant revenue from Canada, involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Canadian economy is very dependent on the demand for, and supply
and price of, natural resources. The Canadian market is relatively concentrated
in issuers involved in the production and distribution of natural resources.
There is a risk that any changes in natural resources sectors could have an
adverse impact on the Canadian economy. Additionally, the Canadian economy is
heavily dependent on relationships with certain key trading partners, including
the United States, countries in the European Union and China. Because the United
States is Canada’s largest trading partner and foreign investor, the Canadian
economy is dependent on and may be significantly affected by the U.S. economy.
Reduction in spending on Canadian products and services or changes in the U.S.
economy may adversely impact the Canadian economy. Trade agreements may further
increase Canada’s dependency on the U.S. economy, and uncertainty as to the
future of such trade agreements may cause a decline in the value of the Fund’s
Shares. Past periodic demands by the Province of Quebec for sovereignty have
significantly affected equity valuations and foreign currency movements in the
Canadian market and such demands may have this effect in the future. In
addition, certain sectors of Canada’s economy may be subject to foreign
ownership limitations. This may negatively impact the Fund’s ability to
invest in Canadian issuers and to pursue its investment objective.
Special
Risk Considerations of Investing in Chinese Issuers. Investments
in securities of Chinese issuers, including issuers outside of China, involve
certain risks and considerations not typically associated with investments in
U.S securities. These risks include among others (i) more frequent (and
potentially widespread) trading suspensions and government interventions with
respect to Chinese issuers resulting in a lack of liquidity and in price
volatility, (ii) currency revaluations and other currency exchange rate
fluctuations or blockage, (iii) the nature and extent of intervention by the
Chinese government in the Chinese securities markets, whether such intervention
will continue and the impact of such intervention or its discontinuation, (iv)
the risk of nationalization or expropriation of assets, (v) the risk that the
Chinese government may decide not to continue to support economic reform
programs, (vi) limitations on the use of brokers, (vii) higher rates of
inflation, (viii) greater political, economic and social uncertainty, (ix)
market volatility caused by any potential regional or territorial conflicts or
natural or other disasters, and (x) the risk of increased trade tariffs,
embargoes, sanctions investment restrictions and other trade limitations.
Certain securities are, or may in the future become restricted, and the Fund may
be forced to sell such securities and incur a loss as a result. In addition, the
economy of China differs, often unfavorably, from the U.S. economy in such
respects as structure, general development, government involvement, wealth
distribution, rate of inflation, growth rate, interest rates, allocation of
resources and capital reinvestment, among others. The Chinese central government
has historically exercised substantial control over virtually every sector of
the Chinese economy through administrative regulation and/or state ownership and
actions of the Chinese central and local government authorities continue to have
a substantial effect on economic conditions in China. In addition, the Chinese
government has from time to time taken actions that influence the prices at
which certain goods may be sold, encourage companies to invest or concentrate in
particular industries, induce mergers between companies in certain industries
and induce private companies to publicly offer their securities to increase or
continue the rate of economic growth, control the rate of inflation or otherwise
regulate economic expansion. The Chinese government may do so in the future as
well, potentially having a significant adverse effect on economic conditions in
China.
Special
Risk Considerations of Investing in Indian Issuers.
Investments in securities of Indian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. Such heightened risks include, among others, greater government control
over the economy, political and legal uncertainty, competition from low-cost
issuers of other emerging economies in Asia, currency fluctuations or blockage
of foreign currency exchanges and the risk of nationalization or expropriation
of assets. Large portions of many Indian companies remain in the hands of
individuals and corporate governance standards of Indian companies may be weaker
and less transparent, which may increase the risk of loss and unequal treatment
of investors. In addition, religious and border disputes persist in India. India
has experienced civil unrest and hostilities with neighboring countries,
including Pakistan, and the Indian government has confronted separatist
movements in several Indian states. India has also experienced acts of terrorism
that have targeted foreigners, which have had a negative impact on tourism, an
important sector of the Indian economy. India has tested nuclear arms, and the
threat of deployment of such weapons could hinder development of the Indian
economy and escalating tensions could impact the broader region.
The
Indian securities markets are smaller and less liquid than securities markets in
more developed economies and are subject to greater price volatility. Issuers in
India are subject to less stringent requirements regarding accounting, auditing
and financial reporting than are issuers in more developed markets, and
therefore, all material information may not be available or reliable. India also
has less developed clearance and settlement procedures, and there have been
times when settlements have been unable to keep pace with the volume of
securities and have been significantly delayed. Indian stock exchanges have
experienced problems such as temporary exchange closures, broker defaults,
settlement delays and strikes by brokers that have affected the market price and
liquidity of the securities of Indian companies. In addition, the governing
bodies of the Indian stock exchanges have from time to time restricted
securities from trading, limited price movements and restricted margin
requirements. Further, from time to time, disputes have occurred between listed
companies and the Indian stock exchanges and other regulatory bodies that, in
some cases, have had a negative effect on market sentiment. In addition,
inflation in India may be at very high levels. High inflation may lead to the
adoption of corrective measures designed to moderate growth, regulate prices of
staples and other commodities and
otherwise
contain inflation. Such measures could inhibit economic activity in India.
Additionally, each of the factors described below could have a negative impact
on the Fund’s performance and increase the volatility of the Fund.
Economic
Risk. The
Indian government has exercised and continues to exercise significant influence
over many aspects of the economy, and the number of public sector enterprises in
India is substantial. Accordingly, Indian government actions in the future could
have a significant effect on the Indian economy. The Indian government has
experienced chronic structural public sector deficits. High amounts of debt and
public spending could have an adverse impact on India’s economy. Services are
the major source of economic growth, accounting for half of India’s output with
less than one quarter of its labor force. Additionally, the Indian economy may
be dependent upon agriculture. About two-thirds of the workforce is in
agriculture. The Fund’s investments may be susceptible to adverse weather
changes including the threat of monsoons and other natural disasters. Despite
strong growth, the World Bank and others express concern about the combined
state and federal budget deficit.
Regulatory
Risk. A
foreign portfolio investor (“FPI”) in India is subject to certain restrictions
on buying, selling or otherwise dealing in securities.
The
Subsidiary, a wholly owned subsidiary located in the Republic of Mauritius, is
registered as an FPI with the Securities and Exchange Board of India in order to
obtain the ability to make and dispose of investments. There can be no assurance
that the Subsidiary will continue to qualify for the FPI license. Loss of the
FPI registration could adversely impact the ability of the Fund to make
investments in India.
The
Securities and Exchange Board of India imposes certain limitations on
participation in an FPI. The Fund may compulsorily redeem units held by such
investor(s) or take other actions in order to comply with applicable Indian
law.
The
Subsidiary’s investments will be made in accordance with investment restrictions
prescribed under the FPI Regulations. If new policy announcements or regulations
in India are made, including potential policies with retroactive effect which
require changes in the structure or operations of the Fund, the performance of
the Fund may be adversely impacted.
In
addition, FPIs that are domiciled in countries which are classified as
“high-risk” jurisdictions or that are monitored by the Financial Action Task
Force may be subject to additional compliance requirements and/or increased
monitoring by the designated depository participant and/or the Securities and
Exchange Board of India. These policies are constantly evolving and could have
an adverse impact on the Fund.
Investment
and Repatriation Restrictions.
The Central Government and the Reserve Bank of India impose certain limits on
the foreign ownership of Indian securities. These restrictions and/or controls
may at times limit or prevent foreign investment in securities of issuers
located or operating in India and may inhibit the Fund’s ability to pursue its
investment objective.
In
the case of an ultimate beneficial owner who has direct or indirect common
shareholding/beneficial ownership/beneficial interest of more than 50% in an FPI
and an offshore derivative instrument (“ODI”) subscriber entity or two or more
FPIs/ODI subscribers, the participation through ODIs would be aggregated with
the direct holding of FPIs or the other concerned ODI subscribers while
determining whether the above investment cap in an Indian company has been
triggered.
Special
Risk Considerations of Investing in Latin American Issuers.
Investments in securities of Latin American issuers involve special
considerations not typically associated with investments in securities of
issuers located in the United States. The economies of certain Latin American
countries have, at times, experienced high interest rates, economic volatility,
inflation, currency devaluations and high unemployment rates. In addition,
commodities (such as oil, gas and minerals) represent a significant percentage
of the region’s exports and many economies in this region are particularly
sensitive to fluctuations in commodity prices. Adverse economic events in one
country may have a significant adverse effect on other countries of this
region.
Most
Latin American countries have experienced severe and persistent levels of
inflation, including, in some cases, hyperinflation. This has, in turn, led to
high interest rates, extreme measures by governments to keep inflation in check,
and a generally debilitating effect on economic growth. Although inflation in
many Latin American countries has lessened, there is no guarantee it will remain
at lower levels.
The
political history of certain Latin American countries has been characterized by
political uncertainty, intervention by the military in civilian and economic
spheres, and political corruption. Such events could reverse favorable trends
toward market and economic reform, privatization, and removal of trade barriers,
and could result in significant disruption in securities markets in the
region.
The
economies of Latin American countries are generally considered emerging markets
and can be significantly affected by currency devaluations. Certain Latin
American countries may also have managed currencies which are maintained at
artificial levels relative to the U.S. dollar rather than at levels determined
by the market. This type of system can lead to sudden and large adjustments in
the currency which, in turn, can have a disruptive and negative effect on
foreign investors. Certain Latin American
countries
also restrict the free conversion of their currency into foreign currencies,
including the U.S. dollar. There is no significant foreign exchange market for
many Latin American currencies and it would, as a result, be difficult for the
Fund to engage in foreign currency transactions designed to protect the value of
the Fund’s interests in securities denominated in such currencies.
Finally,
a number of Latin American countries are among the largest debtors of developing
countries. There have been moratoria on, and a rescheduling of, repayment with
respect to these debts. Such events can restrict the flexibility of these debtor
nations in the international markets and result in the imposition of onerous
conditions on their economies.
Stock
Connect Risk.
The Fund may invest in A-shares listed and traded on the Shanghai Stock Exchange
and the Shenzhen Stock Exchange through Stock Connect, or on such other stock
exchanges that participate in Stock Connect from time to time or in the future.
Trading through Stock Connect is subject to a number of restrictions that may
affect the Fund’s investments and returns. For example, trading through Stock
Connect is subject to daily quotas that limit the maximum daily net purchases on
any particular day, which may restrict or preclude the Fund’s ability to invest
in Stock Connect A-shares. In addition, investments made through Stock Connect
are subject to trading, clearance and settlement procedures that are relatively
untested in the PRC, which could pose risks to the Fund. Furthermore, securities
purchased via Stock Connect will be held via a book entry omnibus account in the
name of HKSCC, Hong Kong’s clearing entity, at the CSDCC. The Fund’s ownership
interest in Stock Connect securities will not be reflected directly in book
entry with CSDCC and will instead only be reflected on the books of its Hong
Kong sub-custodian. The Fund may therefore depend on HKSCC’s ability or
willingness as record-holder of Stock Connect securities to enforce the Fund’s
shareholder rights. PRC law did not historically recognize the concept of
beneficial ownership; while PRC regulations and the Hong Kong Stock Exchange
have issued clarifications and guidance supporting the concept of beneficial
ownership via Stock Connect, the interpretation of beneficial ownership in the
PRC by regulators and courts may continue to evolve. Moreover, Stock Connect
A-shares generally may not be sold, purchased or otherwise transferred other
than through Stock Connect in accordance with applicable rules.
A
primary feature of Stock Connect is the application of the home market’s laws
and rules applicable to investors in A-shares. Therefore, the Fund’s investments
in Stock Connect A-shares are generally subject to PRC securities regulations
and listing rules, among other restrictions. The Fund will not benefit from
access to Hong Kong investor compensation funds, which are set up to protect
against defaults of trades, when investing through Stock Connect. Stock Connect
is only available on days when markets in both the PRC and Hong Kong are open,
which may limit the Fund’s ability to trade when it would be otherwise
attractive to do so. Since the inception of Stock Connect, foreign investors
(including the Fund) investing in A-shares through Stock Connect have been
temporarily exempt from the PRC corporate income tax and value-added tax on the
gains on disposal of such A-shares. Dividends are subject to PRC corporate
income tax on a withholding basis at 10%, unless reduced under a double tax
treaty with China upon application to and obtaining approval from the competent
tax authority. Aside from these temporary measures, uncertainties in permanent
PRC tax rules governing taxation of income and gains from investments in Stock
Connect A-shares could result in unexpected tax liabilities for the
Fund.
The
Stock Connect program is a relatively new program and may be subject to further
interpretation and guidance. There can be no assurance as to the program’s
continued existence or whether future developments regarding the program may
restrict or adversely affect the Fund’s investments or returns. In addition, the
application and interpretation of the laws and regulations of Hong Kong and the
PRC, and the rules, policies or guidelines published or applied by relevant
regulators and exchanges in respect of the Stock Connect program are uncertain,
and they may have a detrimental effect on the Fund’s investments and
returns.
Subsidiary
Investment Risk. Changes
in the laws of the United States and/or the Cayman Islands, under which the Fund
and the Subsidiary are organized, respectively, could result in the inability of
the Fund to operate as intended and could negatively affect the Fund and its
shareholders. The Subsidiary is not registered under the Investment Company Act
of 1940 and is not subject to the investor protections of the Investment Company
Act of 1940. Thus, the Fund, as an investor in the Subsidiary, will not have all
the protections offered to investors in registered investment
companies.
Sustainability
Investing Strategy Risk.
The Fund’s sustainability strategy could cause it to perform differently
compared to funds that do not have a sustainability focus. The Fund’s
sustainability strategy may result in the Fund investing in securities or
industry
sectors that underperform other securities or underperform the market as a
whole, and may result in the Fund being unable to take advantage of certain
investment opportunities, which may adversely affect investment
performance.
The Fund is also subject to the risk that the companies identified by the
Adviser do not operate as expected when addressing sustainability
issues. Regulatory changes or interpretations regarding the definitions and/or
use of sustainability criteria could have a material adverse effect on the
Fund’s ability to invest in accordance with its sustainability
strategy.
Utilities
Sector Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the utilities sector. Companies in the
utilities sector may be adversely affected by changes in exchange rates,
domestic and international competition, difficulty in raising adequate amounts
of capital and governmental limitation on rates charged to
customers.
ADDITIONAL
REGULATORY CONSIDERATIONS
With
respect to each Fund, the Adviser has claimed an exclusion from the definition
of a “commodity pool operator” (“CPO”) under the U.S. Commodity Exchange Act of
1936, as amended (“CEA”), and the rules of the U.S. Commodity Futures Trading
Commission (“CFTC”) and, therefore, is not subject to CFTC registration or
regulation as a CPO. In addition, with respect to each Fund, the Adviser is
relying upon a related exclusion from the definition of a “commodity trading
advisor” (“CTA”) under the CEA and the rules of the CFTC. The terms of the CPO
exclusion require a Fund, among other things, to adhere to certain limits on its
investments in “commodity interests.” Commodity interests include commodity
futures, commodity options and swaps, which in turn include non-deliverable
currency forward contracts. Because the Adviser and the Funds intend to comply
with the terms of the CPO exclusion, a Fund may, in the future, need to adjust
its investment strategies, consistent with its investment objective to limit its
investments in these types of instruments. The Funds are not intended as
vehicles for trading in the commodity futures, commodity options or swaps
markets. The CFTC has neither reviewed nor approved the Adviser's reliance on
these exclusions, or the Funds, the Subsidiary, their investment strategies or
this prospectus.
INVESTMENTS
IN OTHER EQUITY AND FIXED INCOME SECURITIES
The
investments of the Funds may include, but not be limited to, common stocks,
preferred stocks (either convertible or non-convertible), rights, warrants,
direct equity interests in trusts, partnerships, joint ventures and other
unincorporated entities or enterprises, convertible debt instruments and special
classes of shares available only to foreigners in markets that restrict
ownership of certain shares or classes to their own nationals or
residents.
INVESTING
DEFENSIVELY
Each
Fund may take temporary defensive positions that are inconsistent with the
Fund’s principal investment strategies in anticipation of or in an attempt to
respond to adverse market, economic, political or other conditions. A Fund may
not achieve its investment objective while it is investing
defensively.
SECURITIES
LENDING
Each
Fund may lend its securities as permitted under the Investment Company Act of
1940 (the “1940 Act”), including by participating in securities lending programs
managed by broker-dealers or other institutions. Securities lending allows a
Fund to retain ownership of the securities loaned and, at the same time, earn
additional income. The borrowings must be collateralized in full with cash, U.S.
government securities or high-quality letters of credit.
A
Fund could experience delays and costs in recovering the securities loaned or in
gaining access to the securities lending collateral. If a Fund is not able to
recover the securities loaned, the Fund may sell the collateral and purchase a
replacement investment in the market. The value of the collateral could decrease
below the value of the replacement investment by the time the replacement
investment is purchased. Cash received as collateral and which is invested is
subject to market appreciation and depreciation.
BENEFICIARIES
OF CONTRACTUAL ARRANGEMENTS
VanEck
Funds (the “Trust”) enters into contractual arrangements with various parties,
including, among others, the Funds’ investment adviser, administrator and
distributor, who provide services to the Funds. Shareholders of the Funds are
not parties to, or intended (or “third-party”) beneficiaries of, any of those
contractual arrangements, and those contractual arrangements are not intended to
create in any individual shareholder or group of shareholders any right to
enforce such contractual arrangements against the service providers or to seek
any remedy under such contractual arrangements against the service providers,
either directly or on behalf of the Trust.
This
prospectus provides information concerning the Trust and the Funds that you
should consider in determining whether to purchase shares of a Fund. None of
this prospectus, the Statement of Additional Information (“SAI”) or any document
filed as an exhibit to the Trust’s registration statement, is intended to, nor
does it, give rise to an agreement or contract between the Trust or the Funds
and any investor, or give rise to any contract or other rights in any individual
shareholder, group of shareholders or other person other than any rights
conferred explicitly by federal or state securities laws that may not be
waived.
CHANGING
A FUND’S 80% POLICY
A
Fund’s policy of investing “at least 80% of its net assets” (which includes net
assets plus any borrowings for investment purposes) may be changed by the Board
of Trustees the (“Board”) without a shareholder vote, as long as shareholders
are given 60 days notice of the change.
CYBER
SECURITY
The
Funds and their service providers are susceptible to cyber security risks that
include, among other things, theft, unauthorized monitoring, release, misuse,
loss, destruction or corruption of confidential and highly restricted data;
denial of service attacks; unauthorized access to relevant systems; compromises
to networks or devices that the Funds and their service providers use to service
the Funds’ operations; and operational disruption or failures in the physical
infrastructure or operating systems that support the Funds and their service
providers. Cyber attacks against or security breakdowns of the Funds or their
service providers may
adversely
impact the Funds and their shareholders, potentially resulting in, among other
things, financial losses; the inability of Fund shareholders to transact
business and the Funds to process transactions; the inability to calculate the
Funds’ net asset value; violations of applicable privacy and other laws;
regulatory fines, penalties, reputational damage, reimbursement or other
compensation costs; and/or additional compliance costs. The Funds may incur
additional costs for cyber security risk management and remediation purposes. In
addition, cyber security risks may also impact issuers of securities in which
the Funds invest, which may cause the Funds’ investments in such issuers to lose
value. There can be no assurance that the Funds or their service providers will
not suffer losses relating to cyber attacks or other information security
breaches in the future.
PORTFOLIO
HOLDINGS INFORMATION
Generally,
it is the Funds’ and Adviser’s policy that no current or potential investor,
including any Fund shareholder, shall be provided information about the Funds’
portfolio on a preferential basis in advance of the provision of that
information to other investors. A complete description of the Funds’ policies
and procedures with respect to the disclosure of the Funds’ portfolio securities
is available in the Funds’ SAI.
Portfolio
holdings information for the Funds is available to all investors on the VanEck
website at vaneck.com. Information regarding the Funds’ top holdings and country
and sector weightings, updated as of each month-end, is also located on this
website. Generally, this information is posted to the website within 10 business
days of the end of the applicable month. This information generally remains
available on the website until new information is posted. Each Fund reserves the
right to exclude any portion of these portfolio holdings from publication when
deemed in the best interest of the Fund, and to discontinue the posting of
portfolio holdings information at any time, without prior notice.
PORTFOLIO
INVESTMENTS
The
percentage limitations relating to the composition of a Fund’s portfolio apply
at the time the Fund acquires an investment. A subsequent increase or decrease
in percentage resulting from a change in the value of portfolio securities or
the total or net assets of the Fund will not be considered a violation of the
restriction.
Each
of Global Resources Fund and International Investors Fund offers Class A, Class
C, Class I and Class Y shares. Emerging Markets Fund offers Class A, Class C,
Class I, Class Y and Class Z shares. Emerging Markets Leaders Fund offers Class
A, Class I, Class Y and Class Z shares. Environmental Sustainability Fund offers
Class A, Class I and Class Y shares. Information related to how to buy, sell,
exchange and transfer shares is discussed below. See the “Minimum Purchase”
section for information related to initial and subsequent minimum investment
amounts. The minimum investment amounts vary by share class.
Through
a Financial Intermediary
Primarily,
accounts are opened through a financial intermediary (broker, bank, adviser or
agent). Please contact your financial intermediary for details.
Through
the Transfer Agent, SS&C GIDS, Inc. (SS&C)
You
may buy (purchase), sell (redeem), exchange, or transfer ownership of Class A,
Class C and Class I shares directly through SS&C by mail or telephone, as
stated below. For Class Y and Z shares, shareholders must open accounts and
transact business through a financial intermediary.
The
Funds’ mailing address at SS&C is:
VanEck
Funds
P.O.
Box 218407
Kansas
City, MO 64121-8407
For
overnight delivery:
VanEck
Funds
430
W 7th St., Suite 218407
Kansas
City, MO 64105-1407
Non-resident
aliens cannot make a direct investment to establish a new account in the Funds,
but may invest through their broker or agent.
To
telephone the Funds at SS&C, call VanEck Account Assistance at
800-544-4653.
Purchase
by Mail
To
make an initial purchase, complete the VanEck Account Application and mail it
with your check made payable to VanEck Funds. Subsequent purchases can be made
by check with the remittance stub of your account statement. You cannot make a
purchase by telephone. We cannot accept third party checks, starter checks,
money orders, travelers checks, cashier checks, checks drawn on a foreign bank,
or checks not in U.S. dollars. There are separate applications for VanEck
retirement accounts (see “Retirement Plans” for details). For further details,
see the application or call Account Assistance.
Telephone
Redemption-Proceeds by Check 800-544-4653
If
your account has the optional Telephone Redemption Privilege, you can redeem up
to $50,000 per day. The redemption check must be payable to the registered
owner(s) at the address of record (which cannot have been changed within the
past 30 days). You automatically get the Telephone Redemption Privilege (for
eligible accounts) unless you specifically refuse it on your Account
Application, on broker/agent settlement instructions, or by written notice to
SS&C. All accounts are eligible for the privilege except those registered in
street, nominee, or corporate name and custodial accounts held by a financial
institution, including VanEck sponsored retirement plans.
Expedited
Redemption-Proceeds by Wire 800-544-4653
If
your account has the optional Expedited Redemption Privilege, you can redeem a
minimum of $1,000 or more per day by telephone or written request with the
proceeds wired to your designated bank account. The Funds reserve the right to
waive the minimum amount. This privilege must be established in advance by
Application. For further details, see the Application or call Account
Assistance.
Written
Redemption
Your
written redemption (sale) request must include:
■ Fund
and account number.
■ Number
of shares or dollar amount to be redeemed, or a request to sell “all shares.”
■ Signatures
of all registered account holders, exactly as those names appear on the account
registration, including any additional documents concerning authority and
related matters in the case of estates, trusts, guardianships, custodianships,
partnerships and corporations, as requested by SS&C.
■ Special
instructions, including bank wire information or special payee or address.
A
signature guarantee for each account holder will be required if:
■ The
redemption is for $50,000 or more.
■ The
redemption amount is wired.
■ The
redemption amount is paid to someone other than the registered owner.
■ The
redemption amount is sent to an address other than the address of record.
■ The
address of record has been changed within the past 30 days.
Institutions
eligible to provide signature guarantees include banks, brokerages, trust
companies, and some credit unions.
Telephone
Exchange 800-544-4653
If
your account has the optional Telephone Exchange Privilege, you can exchange
between Funds of the same Class without any additional sales charge. Exchanges
of Class C shares are exempt from the Class C contingent deferred redemption
charge (CDRC). The new Class C shares received via the exchange will be charged
the CDRC applicable to the original Class C shares upon redemption. All accounts
are eligible except for omnibus accounts or those registered in street name and
certain custodial retirement accounts held by a financial institution other than
VanEck. For further details regarding exchanges, please see the application,
“Limits and Restrictions” and “Unauthorized Telephone Requests” below, or call
Account Assistance.
Written
Exchange
Written
requests for exchange must include:
■ The
fund and account number to be exchanged out of.
■ The
fund to be exchanged into.
■ Directions
to exchange “all shares” or a specific number of shares or dollar amount.
■ Signatures
of all registered account holders, exactly as those names appear on the account
registration, including any additional documents concerning authority and
related matters in the case of estates, trusts, guardianships, custodianships,
partnerships and corporations, as requested by SS&C.
For
further details regarding exchanges, please see the applicable information in
“Telephone Exchange.”
Certificates
Certificates
are not issued for new or existing shares.
Transfer
of Ownership
Requests
must be in writing and provide the same information and legal documentation
necessary to redeem and establish an account, including the social security or
tax identification number of the new owner.
Redemption
Liquidity
Each
Fund expects to make redemption payments to the shareholder, or shareholder’s
financial intermediary, within 1 to 2 business days following the Fund’s receipt
of the redemption transaction from the shareholder, or shareholder’s financial
intermediary. The financial intermediary acts on behalf of the shareholder and
is responsible for transmitting redemption proceeds to the shareholder. Payment
of redemption proceeds by a Fund may take longer than the time a Fund typically
expects and may take up to 7 days as permitted by the 1940 Act.
Typically,
redemption payments of Fund shares will be made in U.S. dollars. Each Fund
generally expects to satisfy redemption requests from available cash holdings
and sale of portfolio securities. On a less regular basis, a Fund also may draw
on a bank line of credit to meet redemption requests. In stressed market
conditions or for a particularly large redemption, a Fund also reserves the
right to meet redemption requests through a “redemption in kind” as described
below.
Redemption
in Kind
Each
Fund reserves the right to satisfy redemption requests by making payment in
securities (known as a redemption in kind). Redemptions in kind are not
routinely used by the Funds. A Fund may, however, use redemptions in kind during
particularly stressed market conditions or to manage the impact of a large
redemption on the Fund. In such case, the Fund may pay all or part of the
redemption in securities of equal value as permitted under the 1940 Act, and the
rules thereunder. The redeeming shareholder should expect to incur transaction
costs upon the disposition of the securities received and will bear any market
risks associated with such securities until they are converted into cash. A
redemption in kind is treated as a taxable transaction and a sale of the
redeemed shares, generally resulting in capital gain or loss to the redeeming
shareholder subject to certain loss limitation rules.
Redemptions
Initiated by a Fund
Each
Fund reserves the right to redeem your shares in the Fund if the Fund’s Board
determines that the failure to so redeem may have materially adverse
consequences to the shareholders of the Fund. For additional information, please
see “Additional Purchase and Redemption Information-Redemptions Initiated by a
Fund” in the SAI.
LIMITS
AND RESTRICTIONS
Frequent
Trading Policy
The
Board has adopted policies and procedures reasonably designed to deter frequent
trading in shares of each Fund, commonly referred to as “market timing,” because
such activities may be disruptive to the management of each Fund’s portfolio and
may increase a Fund’s expenses and negatively impact the Fund’s performance. As
such, each Fund may reject a purchase or exchange transaction or restrict an
account from investing in the Fund for any reason if the Adviser, in its sole
discretion, believes that a shareholder is engaging in market timing activities
that may be harmful to the Fund. Each Fund discourages and does not accommodate
frequent trading of shares by its shareholders.
Each
Fund invests portions of its assets in securities of foreign issuers, and
consequently may be subject to an increased risk of frequent trading activities
because frequent traders may attempt to take advantage of time zone differences
between the foreign markets in which the Fund’s portfolio securities trade and
the time as of which the Fund’s net asset value is calculated (“time-zone
arbitrage”). Each Fund’s investments in other types of securities may also be
susceptible to frequent trading strategies. These investments include securities
that are, among other things, thinly traded, traded infrequently, or relatively
illiquid, which have the risk that the current market price for the securities
may not accurately reflect current market values. Each Fund has adopted fair
valuation policies and procedures intended to reduce the Fund’s exposure to
potential price arbitrage. However, there is no guarantee that a Fund’s net
asset value will immediately reflect changes in market conditions.
Each
Fund uses a variety of techniques to monitor and detect abusive trading
practices, such as monitoring purchases, redemptions and exchanges that meet
certain criteria established by the Fund, and making inquiries with respect to
such trades. If a transaction is rejected or an account restricted due to
suspected market timing, the investor or his or her financial adviser will be
notified.
With
respect to trades that occur through omnibus accounts at intermediaries, such as
broker-dealers and third party administrators, each Fund requires all such
intermediaries to agree to cooperate in identifying and restricting market
timers in accordance with the Fund’s policies and will periodically request
customer trading activity in the omnibus accounts based on certain criteria
established by the Fund. There is no assurance that a Fund will request such
information with sufficient frequency to detect or deter excessive trading or
that review of such information will be sufficient to detect or deter excessive
trading in omnibus accounts effectively.
Although
each Fund will use reasonable efforts to prevent market timing activities in the
Fund’s shares, there can be no assurances that these efforts will be successful.
As some investors may use various strategies to disguise their trading
practices, a Fund’s ability to detect frequent trading activities by investors
that hold shares through financial intermediaries may be limited by the ability
and/or willingness of such intermediaries to monitor for these
activities.
For
further details, contact Account Assistance.
Unauthorized
Telephone Requests
Like
most financial organizations, VanEck, the Funds and SS&C may only be liable
for losses resulting from unauthorized transactions if reasonable procedures
designed to verify the caller’s identity and authority to act on the account are
not followed.
If
you do not want to authorize the Telephone Exchange or Redemption privilege on
your eligible account, you must refuse it on the Account Application,
broker/agent settlement instructions, or by written notice to SS&C. VanEck,
the Funds, and SS&C reserve the right to reject a telephone redemption,
exchange, or other request without prior notice either during or after the call.
For further details, contact Account Assistance.
AUTOMATIC
SERVICES
Automatic
Investment Plan
You
may authorize SS&C to periodically withdraw a specified dollar amount from
your bank account and buy shares in your Fund account. For further details and
to request an Application, contact Account Assistance.
Automatic
Exchange Plan
You
may authorize SS&C to periodically exchange a specified dollar amount for
your account from one Fund to another Fund. Class C shares are not eligible. For
further details and to request an Application, contact Account
Assistance.
Automatic
Withdrawal Plan
You
may authorize SS&C to periodically withdraw (redeem) a specified dollar
amount from your Fund account and mail a check to you for the proceeds. Your
Fund account must be valued at $10,000 or more at the current offering price to
establish the Plan. Class C shares are not eligible except for automatic
withdrawals for the purpose of retirement account distributions. For further
details and to request an Application, contact Account Assistance.
MINIMUM
PURCHASE
Each
class can set its own transaction minimums and may vary with respect to expenses
for distribution, administration and shareholder services.
For
Class A, Class C and Class Y shares, an initial purchase of $1,000 and
subsequent purchases of $100 or more are required for non-retirement accounts.
There are no purchase minimums for any retirement or pension plan account, for
any account using the Automatic Investment Plan, or for any other periodic
purchase program. Minimums may be waived for initial and subsequent purchases
through “wrap fee” and similar programs offered without a sales charge by
certain financial institutions and third-party recordkeepers and/or
administrators.
For
Class I shares, an initial purchase by an eligible investor of $1 million is
required. The minimum initial investment requirement may be waived or aggregated
among investors, in the Adviser’s discretion, for investors in certain
fee-based, wrap or other no-load investment programs, and for an eligible
Employer-Sponsored Retirement Plan with plan assets of $3 million or more,
sponsored by financial intermediaries that have entered into a Class I agreement
with VanEck, as well as for other categories of investors. An
“Employer-Sponsored Retirement Plan” includes (a) an employer sponsored pension
or profit sharing plan that qualifies (a “Qualified Plan”) under section 401(a)
of the Code, including Code section 401(k), money purchase pension, profit
sharing and defined benefit plans; (b) an ERISA-covered 403(b) plan; and (c)
certain non-qualified deferred compensation arrangements that operate in a
similar manner to a Qualified Plan, such as 457 plans and executive deferred
compensation arrangements, but not including employer-sponsored IRAs. In
addition, members of the Boards of Trustees of VanEck Funds and VanEck VIP Trust
and each officer, director and employee of VanEck may purchase Class I shares
without being subject to the $1 million minimum initial investment requirement.
There are no minimum investment requirements for subsequent purchases to
existing accounts. To be eligible to purchase Class I shares, you must also
qualify as specified in “How to Choose a Class of Shares.”
Class
Z shares have no initial and subsequent purchase minimums, although financial
intermediaries may impose their own minimums. To be eligible to purchase Class Z
shares, you must also qualify as specified in “How to Choose a Class of Shares”
below.
ACCOUNT
VALUE AND REDEMPTION
If
the value of your account falls below $1,000 for Class A, Class C and Class Y
shares and below $500,000 for Class I shares after the initial purchase, each
Fund reserves the right to redeem your shares after 30 days notice to you.
This
does not apply to accounts exempt from purchase minimums as described
above.
HOW
THE FUND SHARES ARE PRICED
Each
Fund buys or sells its shares at its net asset value, or NAV, per share next
determined after receipt of a purchase or redemption plus any applicable sales
charge. Each Fund calculates its NAV per share class every day the New York
Stock Exchange (NYSE) is open, as of the close of regular trading on the NYSE,
which is normally 4:00 p.m. Eastern Time.
You
may enter a buy or sell order when the NYSE is closed for weekends or holidays.
If that happens, your price will be the NAV calculated as of the close of the
next regular trading session of the NYSE. Each Fund may invest in certain
securities which are listed on foreign exchanges that trade on weekends or other
days when the Funds do not price their shares. As a result, the NAV of each
Fund’s shares may change on days when shareholders will not be able to purchase
or redeem shares.
Each
Fund’s investments are generally valued based on market quotations which may be
based on quotes obtained from a quotation reporting system, established market
makers, broker dealers or by an independent pricing service. Short-term debt
investments having a maturity of 60 days or less are valued at amortized cost,
which approximates the fair value of the security. Assets or liabilities
denominated in currencies other than the U.S. dollar are converted into U.S.
dollars at the current market rates on the date of valuation as quoted by one or
more sources. When market quotations are not readily available for a portfolio
security or other asset, or, in the opinion of the Adviser, are deemed
unreliable, a Fund will use the security’s or asset’s “fair value” as determined
in good faith in accordance with the Funds’ Fair Value Pricing Policies and
Procedures, which have been approved by the Board. As a general principle, the
current fair value of a security or other asset is the amount which a Fund might
reasonably expect to receive for the security or asset upon its current
sale.
The
Funds’ Pricing Committee, whose members are selected by the senior management of
the Adviser and reported to the Board, is responsible for recommending fair
value procedures to the Board and for administering the process used to arrive
at fair value prices.
Factors
that may cause a Fund’s Pricing Committee to fair value a security include, but
are not limited to: (1) market quotations are not readily available because a
portfolio security is not traded in a public market, trading in the security has
been suspended, or the principal market in which the security trades is closed,
(2) trading in a portfolio security is limited or suspended and not resumed
prior to the time at which the Fund calculates its NAV, (3) the market for the
relevant security is thin, or the price for the security is “stale” because its
price has not changed for five consecutive business days, (4) the Adviser
determines that a market quotation is not reliable, for example, because price
movements are highly volatile and cannot be verified by a reliable alternative
pricing source, or (5) a significant event affecting the value of a portfolio
security is determined to have occurred between the time of the market quotation
provided for a portfolio security and the time at which the Fund calculates its
NAV.
In
determining the fair value of securities, the Pricing Committee will consider,
among other factors, the fundamental analytical data relating to the security,
the nature and duration of any restrictions on the disposition of the security,
and the forces influencing the market in which the security is
traded.
Foreign
equity securities in which the Funds invest may be traded in markets that close
before the time that each Fund calculates its NAV. Foreign equity securities are
normally priced based upon the market quotation of such securities as of the
close of their respective principal markets, as adjusted to reflect the
Adviser’s determination of the impact of events, such as a significant movement
in the U.S. markets occurring subsequent to the close of such markets but prior
to the time at which the Fund calculates its NAV. In such cases, the Pricing
Committee may apply a fair valuation formula to those foreign equity securities
based on the Committee’s determination of the effect of the U.S. significant
event with respect to each local market.
Certain
of the Funds’ portfolio securities are valued by an independent pricing service
approved by the Board. The independent pricing service may utilize an automated
system incorporating a model based on multiple parameters, including a
security’s local closing price (in the case of foreign securities), relevant
general and sector indices, currency fluctuations, and trading in depositary
receipts and futures, if applicable, and/or research evaluations by its staff,
in determining what it believes is the fair valuation of the portfolio
securities valued by such independent pricing service.
There
can be no assurance that the Funds could purchase or sell a portfolio security
or other asset at the price used to calculate the Funds’ NAV. Because of the
inherent uncertainty in fair valuations, and the various factors considered in
determining value pursuant to the Funds’ fair value procedures, there can be
material differences between a fair value price at which a portfolio security or
other asset is being carried and the price at which it is purchased or
sold.
Furthermore,
changes in the fair valuation of portfolio securities or other assets may be
less frequent, and of greater magnitude, than changes in the price of portfolio
securities or other assets valued by an independent pricing service, or based on
market quotations.
The
Funds offer four classes of shares (three with respect to Environmental
Sustainability Fund, and five with respect to Emerging Markets Fund) with
different sales charges and 12b-1 fee schedules, designed to provide you with
different purchase options according to your investment needs. Class A and Class
C shares are offered to the general public and differ in terms of sales charges
and ongoing expenses. Class C shares automatically convert to Class A shares
eight years after each individual purchase. Class I shares are offered to
eligible investors primarily through certain financial intermediaries that have
entered into a Class I Agreement with VanEck. The Funds reserve the right to
accept direct investments by eligible investors. Class Y shares are offered only
to investors through “wrap fee” and similar programs offered without a sales
charge by certain financial intermediaries and third-party recordkeepers and/or
administrators that have entered into a Class Y agreement with VanEck. Class Z
shares are only offered through financial intermediaries that have entered into
a Class Z Agreement with VanEck and that make Class Z shares available to their
and/or their clients’ programs or plans (e.g., retirement plans). For Class Z
shares, investors in programs or plans offered by financial intermediaries may
be charged fees or commissions by those financial intermediaries. For additional
information, please contact your financial intermediary.
Financial
intermediaries making Fund shares available to their clients determine which
share class(es) to make available. Your financial intermediary may receive
different compensation for selling one class of shares than for selling another
class, which may depend on, among other things, the type of investor account and
the policies, procedures and practices adopted by your financial intermediary.
You should review these arrangements with your financial
intermediary.
■ CLASS
A Shares
are offered at net asset value plus an initial sales charge at time of purchase
of up to 5.75% of the public offering price. The initial sales charge is reduced
for purchases of $25,000 or more. For further information regarding sales
charges, breakpoints and other discounts, please see below. The 12b-1 fee is
0.25% annually.
■ CLASS
C Shares
are offered at net asset value with no initial sales charge, but are subject to
a contingent deferred redemption charge (“CDRC”) of 1.00% on all redemptions
during the first 12 months after purchase. The CDRC may be waived under certain
circumstances; please see “Telephone Exchange” and below. The 12b-1 fee is 1.00%
annually.
■ CLASS
I Shares
are offered with no sales charges on purchases, no CDRC, and no 12b-1 fee. To be
eligible to purchase Class I (Institutional) shares, you must be an eligible
investor that is making or has made a minimum initial investment of at least $1
million (which may be reduced or waived under certain circumstances) in Class I
shares of a Fund. Eligible investors in Class I shares include corporations,
foundations, family offices and other institutional organizations; high net
worth individuals; persons purchasing through certain financial intermediaries
or a bank, trust company or similar institution investing for its own account or
for the account of a client when such institution has entered into a Class I
agreement with VanEck and makes Class I shares available to the client’s program
or plan.
■ CLASS
Y Shares
are offered with no sales charges on purchases, no CDRC, and no 12b-1 fee. To be
eligible to purchase Class Y shares, you must be an eligible investor in a
“wrap-fee” or other fee-based program, including an Employer-Sponsored
Retirement Plan, offered through a financial intermediary that has
entered
into a Class Y Agreement with VanEck, and makes Class Y shares available to that
program or plan. An “Employer-Sponsored Retirement Plan” includes (a) an
employer sponsored pension or profit sharing plan that qualifies (a “Qualified
Plan”) under section 401(a) of the Code, including Code section 401(k), money
purchase pension, profit sharing and defined benefit plans; (b) an ERISA-covered
403(b) plan; and (c) certain non-qualified deferred compensation arrangements
that operate in a similar manner to a Qualified Plan, such as 457 plans and
executive deferred compensation arrangements, but not including
employer-sponsored IRAs.
■ CLASS
Z Shares
are only offered through financial intermediaries that have entered into a Class
Z agreement with VanEck and that make Class Z shares available to their and/ or
their clients’ programs or plans. Such financial intermediaries may trade and
hold Class Z shares on behalf of other financial intermediaries (including
third-party retirement plan recordkeepers). Financial intermediaries determine
which of their and/or their clients’ programs or plans may use Class Z shares,
and may establish certain minimum investment amounts and/or other criteria.
Investors in plans or programs offered by financial intermediaries may be
charged fees or commissions by those financial intermediaries. For additional
information, please contact your financial intermediary.
Financial
intermediaries may offer their clients more than one class of shares of a Fund.
Shareholders who own shares of one class of a Fund and who are eligible to
invest in another class of the same Fund may be eligible to convert their shares
from one class to the other. Shareholders no longer participating in a fee-based
program may be subject to conversion of their current class of shares by their
financial intermediary to another class of shares of the Fund having expenses
that may be higher than the expenses of their current class of shares. The
timing and implementation of such conversions are at the discretion of the
shareholder’s financial intermediary. For additional information, please contact
your financial intermediary or see “Class Conversions” in the SAI. Investors
should consider carefully a Fund’s share class expenses and applicable sales
charges and fees plus any separate transaction and other fees charged by such
intermediaries in connection with investing in each available share class before
selecting a share class. It is the responsibility of the financial intermediary
and the investor to choose the proper share class and notify SS&C or VanEck
of that share class at the time of each purchase. More information regarding
share class eligibility is available in the “How to Buy, Sell, Exchange, or
Transfer Shares” section of the prospectus and in “Purchase of Shares” in the
SAI.
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. A sales charge means that a portion of your initial
investment goes toward the sales charge and is not invested. The initial sales
charge varies depending upon the size of your purchase, as set forth below, and
a percentage is paid to the financial intermediary who sells your Class A
shares. 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
distribution. 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. Class A does charge a contingent
deferred sales charge and Class C does charge a contingent deferred redemption
charge as set forth below. For Class Z shares, investors in programs or plans
offered by financial intermediaries may be charged fees or commissions by those
financial intermediaries. For additional information, please contact your
financial intermediary.
Different
intermediaries may impose different sales charges (including potential
reductions in or waivers of sales charges) other than those listed below. Such
intermediary-specific sales charge variations are described in Appendix A to
this prospectus, entitled “Intermediary Sales Charge Discounts and Waivers.”
Appendix A is incorporated herein by reference (is legally a part of this
prospectus). Such intermediary-specific sales charge discounts and waivers may
not be available to purchasers whose accounts are not held at and traded by
their intermediary.
In
all instances, it is the purchaser’s responsibility to notify the Fund or the
purchaser’s financial intermediary at the time of purchase of any facts
qualifying the purchaser for sales charge discounts or waivers.
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Class
A Shares Sales Charges |
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Sales
Charge as a Percentage of |
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Dollar
Amount of Purchase |
Offering Price |
Net
Amount Invested |
Percentage
to Brokers or Agents1 |
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Less
than $25,000 |
5.75% |
6.10% |
5.00% |
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$25,000
to less than $50,000 |
5.00% |
5.30% |
4.25% |
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$50,000
to less than $100,000 |
4.50% |
4.70% |
3.90% |
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$100,000
to less than $250,000 |
3.00% |
3.10% |
2.60% |
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$250,000
to less than $500,000 |
2.50% |
2.60% |
2.20% |
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$500,000
to less than $1,000,000 |
2.00% |
2.00% |
1.75% |
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$1,000,000
and over |
None2 |
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1 Brokers
or Agents who receive substantially all of the sales charge for shares they sell
may be deemed to be statutory underwriters.
2 The
Distributor may pay a Finder’s Fee of 1.00% to eligible brokers and agents on
qualified commissionable shares purchased at or above the $1 million breakpoint
level. Such shares may be subject to a 1.00% contingent deferred sales charge if
redeemed within one year from the date of purchase. For additional information,
see “Contingent Deferred Sales Charge for Class A Shares” below or contact the
Distributor or your financial intermediary.
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Class
C Shares Sales Charges |
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Year
Since Purchase |
Contingent
Deferred Redemption Charge (CDRC)† |
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First |
1.00%
of the lesser of NAV or purchase price |
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Second
and thereafter |
None |
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Class
C Broker/Agent Compensation: 1.00% (0.75 of 1.00% distribution fee and 0.25 of
1.00% service fee) of the amount purchased at time of investment.
†
Shares will be redeemed in the following order: (1) shares not subject to the
CDRC (dividend reinvestment, etc.), (2) first in, first out.
CONTINGENT
DEFERRED SALES CHARGE FOR CLASS A SHARES
Class
A shares purchased at or above the $1 million breakpoint in accordance with the
sales load schedule identified above (referred to as “commissionable” shares)
that are redeemed within one year of purchase will be subject to a contingent
deferred sales charge (“CDSC”) in the amount of 1.00% of the lesser of the
current value of the shares redeemed or the original purchase price of such
shares. The CDSC will be paid to the Distributor as reimbursement for any
Finder’s Fee previously paid by the Distributor to an eligible broker or agent
at the time the commissionable shares were purchased and may be waived by the
Distributor if the original purchase did not result in the payment of a Finder’s
Fee. For purposes of calculating the CDSC, shares will be redeemed in the
following order: (1) first shares that are not subject to the CDSC (e.g.,
dividend reinvestment shares and other non-commissionable shares) and (2) then
other shares on a first in, first out basis. A CDSC will not be charged in
connection with an exchange of Class A shares into Class A shares of another
VanEck Fund; however, the shares received upon an exchange will be subject to
the CDSC if they are subsequently redeemed within one year of the date of the
original purchase (subject to the same terms and conditions described above).
For further details regarding eligibility for the $1 million breakpoint, please
see Section 3. “Sales Charges-Reduced or Waived Sales Charges”
below.
REDUCED
OR WAIVED SALES CHARGES
You
may qualify for a reduced or waived sales charge as stated below, or under other
appropriate circumstances. You (or your broker or agent) must notify SS&C or
VanEck at the time of each purchase or redemption whenever a reduced or waived
sales charge is applicable. The term “purchase” refers to a single purchase by
an individual (including spouse and children under age 21), corporation,
partnership, trustee, or other fiduciary for a single trust, estate, or
fiduciary account. For further details, see the SAI. The value of shares owned
by an individual in Class A and Class C of each of the VanEck Funds may be
combined for a reduced sales charge in Class A shares only.
In
order to obtain a reduced sales charge (i.e.,
breakpoint discount) or to meet an eligibility minimum, it will be necessary at
the time of purchase for you to inform your broker or agent (or SS&C or
VanEck, as applicable), of the existence of other accounts in which there are
holdings eligible to be aggregated to meet the sales load breakpoints or
eligibility minimums and of any facts qualifying the purchaser for sales charge
discounts or waivers.
The
Funds make available information regarding applicable sales loads, breakpoint
discounts, reduced or waived sales charges and eligibility minimums, on their
website at vaneck.com, free of charge.
FOR
CLASS A SHARES
Right
of Accumulation
When
you buy shares, the amount you purchase will be combined with the value, at
current offering price, of any existing Fund shares you own. This total will
determine the sales charge level for which you qualify.
Your
purchases eligible for Right of Accumulation reduced sales charge (i.e.
breakpoint discount) include Class A shares purchased for individual accounts
registered in the name of:
■ You,
individually;
■ Your
“family member,” defined as your spouse (by marriage or by common law
marriage/civil union as recognized by applicable state or federal law) and your
children/step-children if under the age of 21;
■ You,
when you own shares jointly with another individual(s) who is a non-family
member;
■ You
or a family member acting as the trustee, custodian, or other acting fiduciary
title for a single trust, estate, or fiduciary account;
■ Your
sole ownership business or the sole ownership business of a family member on
which you or a family member are the authorized signer;
■ Trust
Grantor (a trust established by you or a family member who is acting as the
grantor of the trust);
■ Trust
Beneficiary (a trust established by you or a family member who is the beneficial
owner of the trust);
■ A
single corporation or partnership.
Combined
Purchases
The
combined amounts of your multiple purchases in the Funds on a single day
determines the sales charge level for which you qualify.
Letter
of Intent
If
you plan to make purchases of the Fund that are eligible for a right of
accumulation discount, as described above, within a 13 month period in Class A
shares that total an amount equal to a reduced sales charge level, you can
establish a Letter of Intent (LOI) for that amount. Under the LOI, your initial
and subsequent purchases during that period receive the sales charge level
applicable to that total amount. The amount of a purchase not originally made
pursuant to the LOI may be included under a backdated LOI executed within 90
days of such purchase (“accumulation credit”) to fulfill the LOI. For LOIs, out
of an initial purchase (or subsequent purchases if necessary), 5% of the
specified dollar amount of an LOI will be held in escrow by SS&C in a
shareholder’s account until the shareholder’s total purchases of the Funds
pursuant to the LOI plus a shareholder’s accumulation credit (if any) equal the
amount specified in the Letter. For further details, see the Application and the
SAI.
Persons
Affiliated with VanEck
Trustees,
officers, and full-time employees (and their families) of the Funds, Adviser or
Distributor may buy without a sales charge. Also, employees (and their spouses
and children under age 21) of a brokerage firm or bank that has a selling
agreement with VanEck, and other affiliates and agents, may buy without a sales
charge.
Load-waived
Programs Through Financial Intermediaries
Financial
intermediaries may offer shares without a sales charge if they: (i) are
compensated by their clients on a fee-only basis, including but not limited to
Investment Advisors, Financial Planners, and Bank Trust Departments; or (ii)
have entered into an agreement with VanEck to offer Class A shares at net asset
value through a no-load network or platform, or through a self-directed
investment brokerage account program that may or may not charge a transaction
fee to its clients.
Institutional
Retirement Programs
Certain
financial institutions and third-party recordkeepers and/or administrators who
have agreements with VanEck to offer Class A shares at net asset value may buy
shares without a sales charge for their accounts on behalf of investors in
retirement plans and deferred compensation plans.
Reinstatement
Privilege
You
have the right, once a year, to reinvest (“buy back”) proceeds of a redemption
from Class A shares of a Fund into that Fund or Class A shares of another fund
of the VanEck Funds within 60 days without a sales charge. If you invest into
the same Fund within 30 days before or after you redeem your shares at a loss,
the “wash sale” rules apply to disallow for tax purposes a loss realized upon
redemption.
FOR
CLASS C SHARES
Death
or Disability
The
CDRC may be waived upon (1) death or (2) disability as defined by the
Code.
Certain
Retirement Distributions
The
CDRC may be waived for lump sum or other distributions from IRA, Qualified
(Pension and Profit Sharing) Plans, and 403(b) accounts following retirement or
at age 72. It is also waived for distributions from qualified pension or profit
sharing plans after employment termination after age 55. In addition, it is
waived for shares redeemed as a tax-free return of an excess
contribution.
Automatic
Conversion Feature
After
eight years, Class C shares of each of the Funds will convert automatically to
Class A shares of the respective Fund with no initial sales charge. The
eight-year period runs from the last day of the month in which the shares were
purchased, or in the case of Class C shares acquired through an exchange, from
the last day of the month in which the original Class C shares were purchased.
Class C shares held for eight years are converted to Class A shares on the fifth
calendar day of the month following their eight-year anniversary (or the next
business day thereafter if the fifth is a non- business day).
FOR
CLASS I, CLASS Y AND CLASS Z SHARES
No
initial sales charge, or CDRC fee is imposed on Class I, Class Y or Class Z
shares. Class I, Class Y and Class Z are no-load share classes.
PLAN
OF DISTRIBUTION (12b-1 PLAN)
Each
of the Funds has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Act that allows the Fund to pay distribution fees for the sale and distribution
of its shares. Of the amounts expended under the plan for the fiscal year ended
December 31, 2022 for all VanEck Funds, approximately 94% was paid to Brokers
and Agents who sold shares or serviced accounts of Fund shareholders. The
remaining 6% was retained by the Distributor to pay expenses such as printing
and mailing prospectuses and sales material. Because these fees are paid out of
the Fund’s assets on an on- going basis, over time these fees will increase the
cost of your investment and may cost you more than paying other types of sales
charges. Class I, Class Y and Class Z shares do not have 12b-1 fees. For a
complete description of the Plan of Distribution, please see “Plan of
Distribution (12b-1 Plan)” in the SAI.
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VanEck
Funds Annual 12b-1 Schedule |
Fee
to Fund |
Payment
to Dealer |
|
|
Emerging
Markets Fund-A |
0.25% |
0.25 |
% |
|
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|
Emerging
Markets Fund-C |
1.00% |
1.00 |
% |
* |
|
|
Emerging
Markets Leaders Fund-A |
0.25% |
0.25 |
% |
|
|
|
Environmental
Sustainability Fund-A |
0.25% |
0.25 |
% |
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|
Global
Resources Fund-A |
0.25% |
0.25 |
% |
|
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|
Global
Resources Fund-C |
1.00% |
1.00 |
% |
* |
|
|
International
Investors Gold Fund-A |
0.25% |
0.25 |
% |
|
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|
International
Investors Gold Fund-C |
1.00% |
1.00 |
% |
* |
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* Class
C payment to brokers or agents begins to accrue after the 12th month following
the purchase trade date. Each purchase must age that long or there is no
payment. Shares purchased due to the automatic reinvestment of dividends and
capital gains distributions do not age and begin accruing 12b-1 fees
immediately.
If
more than one member of your household is a shareholder of any of the funds in
the VanEck Funds, regulations allow us, subject to certain requirements, to
deliver single copies of your shareholder reports, prospectuses and prospectus
supplements to a shared address for multiple shareholders. For example, a
husband and wife with separate accounts in the same fund who have the same
shared address generally receive two separate envelopes containing the same
report or prospectus. Under the system, known as “householding,” only one
envelope containing one copy of the same report or prospectus will be mailed to
the shared address for the household. You may benefit from this system in two
ways, a reduction in mail you receive and a reduction in fund expenses due to
lower fund printing and mailing costs. However, if you prefer to continue to
receive separate shareholder reports and prospectuses for each shareholder
living in your household now or at any time in the future, please call Account
Assistance at 800-544-4653.
Fund
shares may be invested in tax-advantaged retirement plans sponsored by VanEck or
other financial organizations. Retirement plans sponsored by VanEck use UMB Bank
n.a. as custodian and must receive investments directly by check or wire using
the appropriate VanEck retirement plan application. Confirmed trades through a
broker or agent cannot be accepted. To obtain applications and helpful
information on VanEck retirement plans, contact your broker or agent or Account
Assistance.
Retirement
Plans Sponsored by VanEck:
Traditional
IRA
Roth
IRA
SEP
IRA
TAXATION
OF DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS YOU RECEIVE
Each
Fund intends to qualify each year as a regulated investment company under the
Code. As a regulated investment company, the Fund generally pays no federal
income tax on the income and gains it distributes to you.
For
tax-reportable accounts, dividends and capital gains distributions are normally
taxable even if they are reinvested. Fund distributions of short-term capital
gains are taxed as ordinary income. Fund distributions of long-term capital
gains are taxed at long-term capital gain rates no matter how long you have
owned your fund shares. Certain income dividends are treated as qualified
dividend income, taxable at long-term capital gain rates provided certain
holding period requirements are met. Tax laws and regulations are subject to
change.
At
the time you purchase your Fund shares, the Fund’s NAV may reflect undistributed
income, undistributed capital gains, or net unrealized appreciation in the value
of portfolio securities held by the Fund. For taxable investors, a subsequent
distribution to you of such amounts, although constituting a return of your
investment, would be taxable. Buying shares in the Fund just before it declares
an income dividend or capital gains distribution is sometimes known as “buying a
dividend.”
TAXATION
OF SHARES YOU SELL
For
tax-reportable accounts, when you redeem your shares you may incur a capital
gain or loss on the proceeds. The amount of gain or loss, if any, is the
difference between the amount you paid for your shares (including reinvested
dividends and capital gains distributions) and the amount you receive from your
redemption. Be sure to keep your regular statements; they contain the
information necessary to calculate the capital gain or loss. An exchange of
shares from one Fund to another will be treated as a sale and purchase of Fund
shares. It is therefore a taxable event.
COST
BASIS REPORTING
As
required by law, for shares purchased on and after January 1, 2012 in accounts
eligible for IRS Tax Form 1099-B tax reporting by VanEck Funds for which tax
basis information is available (“covered shares”), the VanEck Funds will provide
cost basis information to you and the IRS for shares using the IRS Tax Form
1099-B. Generally, cost basis is the dollar amount paid to purchase shares,
including purchases of shares made by reinvestment of dividends and capital
gains distributions, adjusted for various items, such as sales charges and
transaction fees, wash sales, and returns of capital.
The
cost basis of your shares will be calculated using the Fund’s default cost basis
method of Average Cost, and the Fund will deplete your oldest shares first,
unless you instruct the Fund to use a different cost basis method. You may elect
the cost basis method that best fits your specific tax situation using VanEck’s
Cost Basis Election Form. It is important that any such election be received in
writing from you by the VanEck Funds before you redeem any covered shares since
the cost basis in effect at the time of redemption, as required by law, will be
reported to you and the IRS. Particularly, any election or revocation of the
Average Cost method must be received in writing by the VanEck Funds before you
redeem covered shares. The VanEck Funds will process any of your future
redemptions by depleting your oldest shares first (FIFO). If you elect a cost
basis method other than Average Cost, the method you chose will not be utilized
until shares held prior to January 1, 2012 are liquidated. Cost basis reporting
for non-covered shares will be calculated and reported separately from covered
shares. You should carefully review the cost basis information provided by the
Fund and make any additional cost basis, holding period, or other adjustments
that are required when reporting these amounts on your federal, state, and local
income tax returns. For tax advice specific to your situation, please contact
your tax advisor and visit the IRS website at IRS.gov. The VanEck Funds cannot
and do not provide any advice, including tax advice.
To
obtain VanEck’s Cost Basis Election Form and to learn more about the cost basis
elections offered by the VanEck Funds, please go to our website at vaneck.com or
call VanEck Account Services at 800-544-4653.
BACKUP
WITHHOLDING
By
law, if you do not provide the Fund with your proper taxpayer identification
number and certain required certifications, you may be subject to backup
withholding on any distributions of income, capital gains, or proceeds from the
sale of your shares. The Fund also must withhold if the IRS instructs it to do
so. When withholding is required, the amount will be 24% of any distributions or
proceeds paid.
STATE
AND LOCAL TAXES
Fund
distributions and gains from the sale or exchange of your Fund shares generally
are subject to state and local taxes.
NON-RESIDENT
ALIENS
Dividends
and short-term capital gains, if any, paid to non-resident aliens generally are
subject to the maximum withholding tax (or lower tax treaty rates for certain
countries). The IRS considers these dividends U.S. source income. Exemptions
from U.S. withholding tax are provided for certain capital gain dividends paid
by the Fund from net long-term capital gains, interest-related dividends paid by
the Fund from its qualified net interest income from U.S. sources and short-
term capital gain dividends, if such amounts are reported by the Fund. However,
notwithstanding such exemptions from U.S. withholding at the source, any such
dividends and distributions of income and capital gains will be subject to
backup withholding at a rate of 24% if you fail to properly certify that you are
not a U.S. person.
As
part of the Foreign Account Tax Compliance Act, (“FATCA”), the Funds are
required to withhold a 30% federal tax on income dividends paid by the Fund to
(i) foreign financial institutions (“FFIs”), including non-U.S. investment
funds, unless they agree to collect and disclose to the IRS information
regarding their direct and indirect U.S. account holders and (ii) certain
nonfinancial foreign entities (“NFFEs”), unless they certify certain information
regarding their direct and indirect U.S. owners. After December 31, 2018, FATCA
withholding also would have applied to certain capital gain distributions,
return of capital distributions and the proceeds arising from the sale of Fund
shares; however, based on proposed regulations issued by the IRS, which can be
relied on currently, such withholding is no longer required unless final
regulations provide otherwise (which is not expected). To avoid possible
withholding, FFIs, other than FFIs subject to special treatment under certain
intergovernmental agreements, will need to enter into agreements with the IRS
which state that they will provide the IRS information, including the names,
account numbers and balances, addresses and taxpayer identification numbers of
U.S. account holders and comply with due diligence procedures with respect to
the identification of U.S. accounts as well as agree to withhold tax on certain
types of withholdable payments made to non-compliant foreign financial
institutions or to applicable foreign account holders who fail to provide the
required information to the IRS, or similar account information and required
documentation to a local revenue authority, should an applicable
intergovernmental agreement be implemented. NFFEs will need to provide certain
information regarding each substantial U.S. owner or certifications of no
substantial U.S. ownership, unless certain exceptions apply, or agree to provide
certain information to the IRS.
The
Funds may be subject to the FATCA withholding obligation, and also will be
required to perform due diligence reviews to classify foreign entity investors
for FATCA purposes. Investors are required to agree to provide information
necessary to allow the Funds to comply with the FATCA rules. If the Funds are
required to withhold amounts from payments pursuant to FATCA, investors will
receive distributions that are reduced by such withholding amounts.
Because
everyone’s tax situation is unique, you should consult your tax professional
about federal, state, local, or foreign tax consequences before making an
investment in the Fund.
Each
Fund makes distributions of all of its net investment income to shareholders as
dividends annually. Each Fund makes distributions of any net capital gains, at
least annually, in December. See your tax adviser for details. Occasionally, a
dividend and/or capital gain distribution may be made outside of the normal
schedule.
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Dividends
and Capital Gains Distributions Schedule |
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Fund |
Dividends |
Distribution
of Short-Term and Long-Term Capital Gains |
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|
Emerging
Markets Fund |
December |
December |
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Emerging
Markets Leaders Fund |
December |
December |
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|
Environmental
Sustainability Fund |
December |
December |
|
|
Global
Resources Fund |
December |
December |
|
|
International
Investors Gold Fund |
December |
December |
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Dividends
and Capital Gains Distributions Reinvestment Plan
Dividends
and/or distributions are automatically reinvested into your account without a
sales charge, unless you elect a cash payment. You may elect cash payment either
on your original Account Application, or by calling Account Assistance at
800-544-4653.
Divmove
You
can have your cash dividends from a Class A Fund automatically invested in Class
A shares of another VanEck Fund. Cash dividends are invested on the payable
date, without a sales charge. For details and an Application, call Account
Assistance.
INFORMATION
ABOUT FUND MANAGEMENT
INVESTMENT
ADVISER
Van
Eck Associates Corporation (the “Adviser”), 666 Third Avenue, New York, New York
10017, is the Adviser to the Fund. The Adviser has been an investment adviser
since 1955 and also acts as adviser or sub-adviser to other mutual funds,
exchange-traded funds, other pooled investment vehicles and separate
accounts.
Jan
F. van Eck and members of his family own 100% of the voting stock of the
Adviser. As of December 31, 2022, the Adviser’s assets under management were
approximately $69.03 billion.
Fees
paid to the Adviser:
Emerging Markets Fund, Emerging Markets Leaders Fund, and Environmental
Sustainability Fund pay the Adviser a monthly fee at the annual rate of 0.75% of
average daily net assets of the respective Fund. Global Resources Fund pays the
Adviser a monthly fee at the annual rate of 1.00% of the first $2.5 billion of
average daily net assets of the Fund and 0.90% of average daily net assets in
excess of $2.5 billion, which includes the fees paid for accounting and
administrative services. International Investors Gold Fund pays the Adviser a
monthly fee at the annual rate of 0.75% of the first $500 million of average
daily net assets of the Fund, 0.65% of the next $250 million of average daily
net assets and 0.50% of average daily net assets in excess of $750 million. The
Adviser also performs accounting and administrative services for Emerging
Markets Fund and International Investors Gold Fund. For these services, Emerging
Markets Fund pays the Adviser a monthly fee at the annual rate of 0.25% of
average daily net assets and International Investors Gold Fund pays the Adviser
a monthly fee at the annual rate of 0.25% of the first $750 million of average
daily net assets and 0.20% of average daily net assets in excess of $750
million. For purposes of calculating these fees for the International Investors
Gold Fund, the net assets of the Fund include the value of the Fund’s interest
in the Subsidiary. The Subsidiary does not pay the Adviser a fee for managing
the Subsidiary’s portfolio.
The
Adviser has agreed to waive fees and/or pay expenses for Emerging Markets Fund
to the extent necessary to prevent the operating expenses of Emerging Markets
Fund (excluding acquired fund fees and expenses, interest expense, trading
expenses, dividends and interest payments on securities sold short, taxes and
extraordinary expenses) from exceeding 1.60% for Class A, 2.50% for Class C,
1.00% for Class I, 1.10% for Class Y, and 0.90% for Class Z of Emerging Markets
Fund’s average daily net assets per year until May 1, 2024. During such
time, the expense limitation is expected to continue until the Board acts to
discontinue all or a portion of such expense limitation.
The
Adviser has agreed to waive fees and/or pay expenses for Emerging Markets
Leaders Fund to the extent necessary to prevent the operating expenses of the
Fund (excluding acquired fund fees and expenses, interest expense, trading
expenses, dividends and interest payments on securities sold short, taxes and
extraordinary expenses) from exceeding 1.45% for Class A, 0.85% for Class I,
0.95% for Class Y, and 0.75% for Class Z of the Fund’s average daily net assets
per year until May 1, 2024. During such time, the expense limitation is expected
to continue until the Board acts to discontinue all or a portion of such expense
limitation.
The
Adviser has agreed to waive fees and/or pay expenses for the Environmental
Sustainability Fund to the extent necessary to prevent the operating expenses of
the Fund (excluding acquired fund fees and expenses, interest expense, trading
expenses, dividends and interest payments on securities sold short, taxes and
extraordinary expenses) from exceeding 1.25% for Class A , 0.95% for Class I,
and 1.05% for Class Y of the Fund’s average daily net assets per year until
May 1, 2024. During such time, the expense limitation is expected to
continue until the Board acts to discontinue all or a portion of such expense
limitation.
The
Adviser has agreed to waive fees and/or pay expenses for Global Resources Fund
to the extent necessary to prevent the operating expenses of Global Resources
Fund (excluding acquired fund fees and expenses, interest expense, trading
expenses, dividends and interest payments on securities sold short, taxes and
extraordinary expenses) from exceeding 1.38% for Class A, 2.20% for Class C,
0.95% for Class I, and 1.13% for Class Y of Global Resources Fund’s average
daily net assets per year until May 1, 2024. During such time, the expense
limitation is expected to continue until the Board acts to discontinue all or a
portion of such expense limitation.
The
Adviser has agreed to waive fees and/or pay expenses for International Investors
Gold Fund to the extent necessary to prevent the operating expenses of
International Investors Gold Fund (excluding acquired fund fees and expenses,
interest expense, trading expenses, dividends and interest payments on
securities sold short, taxes and extraordinary expenses) from exceeding 1.45%
for Class A, 2.20% for Class C, 1.00% for Class I, and 1.10% for Class Y of
International Investors Gold Fund’s average daily net assets per year until
May 1, 2024. During such time, the expense limitation is expected to
continue until the Board acts to discontinue all or a portion of such expense
limitation.
The
Adviser also has agreed to waive fees and/or pay expenses for each Fund to the
extent necessary to prevent the operating expenses of a Fund’s Class Y shares
from exceeding the operating expenses of the Fund’s Class A shares.
For
each Fund’s most recent fiscal year, the advisory fee paid to the Adviser was as
follows:
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VanEck
Funds |
As
a % of average daily net assets |
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Emerging
Markets Fund |
0.75% |
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Emerging
Markets Leaders Fund1 |
0.75% |
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Environmental
Sustainability Fund |
0.75% |
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Global
Resources Fund |
1.00% |
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International
Investors Gold Fund |
0.70% |
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1
Emerging Markets Leaders Fund commenced operations on March 1,
2022.
A
discussion regarding the basis for the Board’s approval of each Fund's advisory
agreements is available in the Funds' semi-annual report to shareholders for the
period ended June 30, 2022.
PORTFOLIO
MANAGERS
EMERGING
MARKETS FUND and EMERGING MARKETS LEADERS FUND
Portfolio
Managers.
David
A. Semple, Portfolio Manager of the Fund, is primarily responsible for the
day-to-day portfolio management of the Fund.
David
A. Semple.
Mr. Semple is Portfolio Manager of the Fund. He has been with the Adviser since
1998 and is currently the portfolio manager of various funds advised by the
Adviser. Mr. Semple is responsible for asset allocation and stock selection in
global emerging markets.
Ola
El-Shawarby. Ms.
Shawarby is Deputy Portfolio Manager of the Fund. She joined the Adviser as a
Senior Analyst in 2017 and currently serves on the investment team for various
funds advised by the Adviser.
Angus
Shillington.
Mr. Shillington is Deputy Portfolio Manager of the Fund. He joined the Adviser
as a Senior Analyst in 2009 and currently serves on the investment team for
various funds advised by the Adviser.
ENVIRONMENTAL
SUSTAINABILITY FUND
Portfolio
Managers.
Shawn
Reynolds, Portfolio Manager of the Fund, is primarily responsible for the
day-to-day portfolio management of the Fund.
Shawn
Reynolds.
Mr. Reynolds is Portfolio Manager of the Fund and is primarily responsible for
company research and portfolio construction. He has been with the Adviser since
2005 and has over 30 years of experience in the international and financial
markets. Prior to joining the Adviser, Mr. Reynolds was an analyst covering U.S.
oil and gas exploration and production companies at Petrie Parkman & Co. He
has also served as an analyst with Credit Suisse First Boston, Goldman Sachs and
Lehman Brothers.
Veronica
Zhang. Veronica
Zhang is Deputy Portfolio Manager for the Fund. She joined the Adviser in 2013
as an alternative energy analyst and currently serves on the investment team for
various funds advised by the Adviser. Prior to joining the Adviser, Ms. Zhang
held equity research analyst and associate roles at Bank of America Merrill
Lynch.
GLOBAL
RESOURCES FUND
Portfolio
Managers.
Shawn
Reynolds, Portfolio Manager of the Fund, is primarily responsible for the
day-to-day portfolio management of the Fund.
Shawn
Reynolds.
Mr. Reynolds is Portfolio Manager of the Fund and is primarily responsible for
company research and portfolio construction. He has been with the Adviser since
2005 and has over 30 years of experience in the international and financial
markets. Prior to joining the Adviser, Mr. Reynolds was an analyst covering U.S.
oil and gas exploration and production companies at Petrie Parkman & Co. He
has also served as an analyst with Credit Suisse First Boston, Goldman Sachs and
Lehman Brothers.
Charles
T. Cameron.
Mr. Cameron is Deputy Portfolio Manager of the Fund and is primarily responsible
for macroeconomic strategy and trading oversight. He has been with the Adviser
since 1995 and has over 35 years of experience in the international and
financial markets. Prior to joining the Adviser, Mr. Cameron was a trader in
both the Eurobond and emerging market debt for Standard Chartered.
INTERNATIONAL
INVESTORS GOLD FUND
Portfolio
Manager.
Imaru
Casanova, Portfolio Manager of the Fund, is primarily responsible for the
day-to-day portfolio management of the Fund.
Imaru
Casanova.
Ms. Casanova is Portfolio Manager of the Fund. She joined the Adviser in 2011
and also currently serves as a senior precious metals analyst on the investment
team for various funds advised by the Adviser.
Additionally,
Joseph M. Foster, former Portfolio Manager of the Fund, serves as Gold
Strategist.
Joseph
M. Foster.
Mr. Foster is the former Portfolio Manager of the Fund and currently serves as
Gold Strategist. He has been with the Adviser since 1996.
The
SAI provides additional information about the above Portfolio Managers, their
compensation, other accounts they manage, and their securities ownership in the
Funds.
THE
TRUST
For
more information on the Trust, the Trustees and the Officers of the Trust, see
“General Information,” “Description of the Trust” and “Trustees and Officers” in
the SAI.
THE
DISTRIBUTOR
Van
Eck Securities Corporation, 666 Third Avenue, New York, NY 10017 (the
“Distributor”), a wholly owned subsidiary of the Adviser, has entered into a
Distribution Agreement with the Trust for distributing shares of the
Funds.
The
Distributor generally sells and markets shares of the Funds through
intermediaries, such as broker-dealers. The intermediaries may be compensated by
the Funds for providing various services.
In
addition, the Distributor or the Adviser may pay certain intermediaries, out of
its own resources and not as an expense of the Funds, additional cash or
non-cash compensation as an incentive to intermediaries to promote and sell
shares of the Funds and other mutual funds distributed by the Distributor. These
payments are commonly known as “revenue sharing”. The benefits that the
Distributor or the Adviser may receive when each of them makes these payments
include, among other things, placing the Funds on the intermediary’s sales
system and/or preferred or recommended fund list, offering the Funds through the
intermediary’s advisory or other specialized programs, and/or access (in some
cases on a preferential basis over other competitors) to individual members of
the intermediary’s sales force. Such payments may also be used to compensate
intermediaries for a variety of administrative and shareholders services
relating to investments by their customers in the Funds.
The
fees paid by the Distributor or the Adviser to intermediaries may be calculated
based on the gross sales price of shares sold by an intermediary, the net asset
value of shares held by the customers of the intermediary, or otherwise. These
fees may, but are not normally expected to, exceed in the aggregate 0.50% of the
average net assets of the funds attributable to a particular intermediary on an
annual basis.
The
Distributor or the Adviser may also provide intermediaries with additional cash
and non-cash compensation, which may include financial assistance to
intermediaries in connection with conferences, sales or training programs for
their employees, seminars for the public and advertising campaigns, technical
and systems support, attendance at sales meetings and reimbursement of ticket
charges. In some instances, these incentives may be made available only to
intermediaries whose representatives have sold or may sell a significant number
of shares.
Intermediaries
may receive different payments, based on a number of factors including, but not
limited to, reputation in the industry, sales and asset retention rates, target
markets, and customer relationships and quality of service. No one factor is
determinative of the type or amount of additional compensation to be provided.
Financial intermediaries that sell the Funds’ shares may also act as a broker or
dealer in connection with execution of transactions for the Funds’ portfolios.
The Funds and the Adviser have adopted procedures to ensure that the sales of
the Funds’ shares by an intermediary will not affect the selection of brokers
for execution of portfolio transactions.
Not
all intermediaries are paid the same to sell mutual funds. Differences in
compensation to intermediaries may create a financial interest for an
intermediary to sell shares of a particular mutual fund, or the mutual funds of
a particular family of mutual funds. Before purchasing shares of any Funds, you
should ask your intermediary or its representative about the compensation in
connection with the purchase of such shares, including any revenue sharing
payments it receives from the Distributor.
THE
CUSTODIAN
State
Street Bank & Trust Company
One
Lincoln Street
Boston,
MA 02111
THE
TRANSFER AGENT
SS&C
GIDS, Inc.
210
West 10th Street, 8th Floor
Kansas
City, MO 64105
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers
LLP
300
Madison Avenue
New
York, NY 10017
COUNSEL
Stradley
Ronon Stevens and Young, LLP
2005
Market Street, Suite 2600
Philadelphia,
PA 19103
The
financial highlights tables that follow are intended to help you understand each
Fund’s financial performance for the past five years, or as indicated. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned or
lost on an investment in the Fund (assuming reinvestment of all dividends and
distributions). The information for the fiscal year ended December 31, 2022 has
been audited by PricewaterhouseCoopers LLP, the Funds’ independent registered
public accounting firm,whose report, along with the Funds’ financial statements
are included in the Funds’ annual report, which is available upon request. The
information for periods prior to the fiscal year ended December 31, 2022 has
been audited by another independent registered public accounting
firm.
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
A |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
17.02 |
|
|
$ |
20.96 |
|
|
$ |
18.03 |
|
|
$ |
14.14 |
|
|
$ |
18.44 |
|
|
|
|
|
|
Net
investment income (loss) (a) |
0.09 |
|
|
(0.04) |
|
|
(0.08) |
|
|
0.31 |
|
|
0.03 |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
(4.39) |
|
|
(2.52) |
|
|
3.04 |
|
|
3.86 |
|
|
(4.33) |
|
|
|
|
|
|
Total
from investment operations |
(4.30) |
|
|
(2.56) |
|
|
2.96 |
|
|
4.17 |
|
|
(4.30) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.47) |
|
|
— |
|
|
(0.03) |
|
|
(0.28) |
|
|
— |
|
(b) |
|
|
|
|
Net
realized capital gains |
— |
|
|
(1.38) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
Total
distributions |
(0.47) |
|
|
(1.38) |
|
|
(0.03) |
|
|
(0.28) |
|
|
— |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
12.25 |
|
|
$ |
17.02 |
|
|
$ |
20.96 |
|
|
$ |
18.03 |
|
|
$ |
14.14 |
|
|
|
|
|
|
Total
return (c) |
(25.23) |
|
% |
(12.15) |
|
% |
16.43 |
|
% |
29.52 |
|
% |
(23.30) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
1.54 |
|
% |
1.45 |
|
% |
1.47 |
|
% |
1.53 |
|
% |
1.50 |
|
% |
|
|
|
|
Expenses
excluding interest |
1.53 |
|
% |
1.45 |
|
% |
1.47 |
|
% |
1.53 |
|
% |
1.50 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income (loss) |
0.65 |
|
% |
(0.19) |
|
% |
(0.47) |
|
% |
1.86 |
|
% |
0.17 |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
60 |
|
|
$ |
130 |
|
|
$ |
157 |
|
|
$ |
138 |
|
|
$ |
118 |
|
|
|
|
|
|
Portfolio
turnover rate |
11 |
|
% |
38 |
|
% |
30 |
|
% |
24 |
|
% |
39 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Amount
represents less than $0.005 per share.
(c) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
C |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
14.70 |
|
|
$ |
18.47 |
|
|
$ |
16.02 |
|
|
$ |
12.60 |
|
|
$ |
16.55 |
|
|
|
|
|
|
Net
investment income (loss) (a) |
(0.03) |
|
|
(0.18) |
|
|
(0.19) |
|
|
0.16 |
|
|
(0.09) |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
(3.77) |
|
|
(2.21) |
|
|
2.67 |
|
|
3.43 |
|
|
(3.86) |
|
|
|
|
|
|
Total
from investment operations |
(3.80) |
|
|
(2.39) |
|
|
2.48 |
|
|
3.59 |
|
|
(3.95) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.36) |
|
|
— |
|
|
(0.03) |
|
|
(0.17) |
|
|
— |
|
|
|
|
|
|
Net
realized capital gains |
— |
|
|
(1.38) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
Total
distributions |
(0.36) |
|
|
(1.38) |
|
|
(0.03) |
|
|
(0.17) |
|
|
— |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
10.54 |
|
|
$ |
14.70 |
|
|
$ |
18.47 |
|
|
$ |
16.02 |
|
|
$ |
12.60 |
|
|
|
|
|
|
Total
return (b) |
(25.82) |
|
% |
(12.87) |
|
% |
15.49 |
|
% |
28.51 |
|
% |
(23.87) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
2.43 |
|
% |
2.25 |
|
% |
2.27 |
|
% |
2.32 |
|
% |
2.27 |
|
% |
|
|
|
|
Expenses
excluding interest |
2.42 |
|
% |
2.25 |
|
% |
2.27 |
|
% |
2.32 |
|
% |
2.27 |
|
% |
|
|
|
|
Net
investment income (loss) |
(0.25) |
|
% |
(0.98) |
|
% |
(1.25) |
|
% |
1.12 |
|
% |
(0.57) |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
11 |
|
|
$ |
24 |
|
|
$ |
33 |
|
|
$ |
37 |
|
|
$ |
30 |
|
|
|
|
|
|
Portfolio
turnover rate |
11 |
|
% |
38 |
|
% |
30 |
|
% |
24 |
|
% |
39 |
|
% |
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
I |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
18.16 |
|
|
$ |
22.21 |
|
|
$ |
19.01 |
|
|
$ |
14.90 |
|
|
$ |
19.46 |
|
|
|
|
|
|
Net
investment income (a) |
0.17 |
|
|
0.06 |
|
|
— |
|
(b) |
0.43 |
|
|
0.12 |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
(4.68) |
|
|
(2.69) |
|
|
3.23 |
|
|
4.05 |
|
|
(4.58) |
|
|
|
|
|
|
Total
from investment operations |
(4.51) |
|
|
(2.63) |
|
|
3.23 |
|
|
4.48 |
|
|
(4.46) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.57) |
|
|
(0.04) |
|
|
(0.03) |
|
|
(0.37) |
|
|
(0.10) |
|
|
|
|
|
|
Net
realized capital gains |
— |
|
|
(1.38) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
Total
distributions |
(0.57) |
|
|
(1.42) |
|
|
(0.03) |
|
|
(0.37) |
|
|
(0.10) |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
13.08 |
|
|
$ |
18.16 |
|
|
$ |
22.21 |
|
|
$ |
19.01 |
|
|
$ |
14.90 |
|
|
|
|
|
|
Total
return (c) |
(24.81) |
|
% |
(11.76) |
|
% |
17.00 |
|
% |
30.11 |
|
% |
(22.88) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
1.19 |
|
% |
1.14 |
|
% |
1.12 |
|
% |
1.16 |
|
% |
1.14 |
|
% |
|
|
|
|
Net
expenses |
1.01 |
|
% |
1.00 |
|
% |
1.00 |
|
% |
1.00 |
|
% |
1.00 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
expenses excluding interest |
1.00 |
|
% |
1.00 |
|
% |
1.00 |
|
% |
1.00 |
|
% |
1.00 |
|
% |
|
|
|
|
Net
investment income (loss) |
1.17 |
|
% |
0.28 |
|
% |
(0.02) |
|
% |
2.46 |
|
% |
0.68 |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
387 |
|
|
$ |
900 |
|
|
$ |
1,158 |
|
|
$ |
804 |
|
|
$ |
575 |
|
|
|
|
|
|
Portfolio
turnover rate |
11 |
|
% |
38 |
|
% |
30 |
|
% |
24 |
|
% |
39 |
|
% |
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Amount
represents less than $0.005 per share.
(c) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and shareholder transactions. returns for financial
reporting purposes may differ from those for shareholder
transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
Y |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
17.39 |
|
|
$ |
21.33 |
|
|
$ |
18.28 |
|
|
$ |
14.33 |
|
|
$ |
18.73 |
|
|
|
|
|
|
Net
investment income (loss) (a) |
0.15 |
|
|
0.03 |
|
|
(0.02) |
|
|
0.39 |
|
|
0.10 |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
(4.48) |
|
|
(2.57) |
|
|
3.10 |
|
|
3.92 |
|
|
(4.41) |
|
|
|
|
|
|
Total
from investment operations |
(4.33) |
|
|
(2.54) |
|
|
3.08 |
|
|
4.31 |
|
|
(4.31) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.55) |
|
|
(0.02) |
|
|
(0.03) |
|
|
(0.36) |
|
|
(0.09) |
|
|
|
|
|
|
Net
realized capital gains |
— |
|
|
(1.38) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
Total
distributions |
(0.55) |
|
|
(1.40) |
|
|
(0.03) |
|
|
(0.36) |
|
|
(0.09) |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
12.51 |
|
|
$ |
17.39 |
|
|
$ |
21.33 |
|
|
$ |
18.28 |
|
|
$ |
14.33 |
|
|
|
|
|
|
Total
return (b) |
(24.87) |
|
% |
(11.84) |
|
% |
16.86 |
|
% |
30.07 |
|
% |
(23.03) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
1.21 |
|
% |
1.13 |
|
% |
1.14 |
|
% |
1.18 |
|
% |
1.16 |
|
% |
|
|
|
|
Net
expenses |
1.11 |
|
% |
1.10 |
|
% |
1.10 |
|
% |
1.10 |
|
% |
1.10 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
expenses excluding interest |
1.10 |
|
% |
1.10 |
|
% |
1.10 |
|
% |
1.10 |
|
% |
1.10 |
|
% |
|
|
|
|
Net
investment income (loss) |
1.10 |
|
% |
0.16 |
|
% |
(0.10) |
|
% |
2.32 |
|
% |
0.59 |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
390 |
|
|
$ |
1,086 |
|
|
$ |
1,350 |
|
|
$ |
1,287 |
|
|
$ |
907 |
|
|
|
|
|
|
Portfolio
turnover rate |
11 |
|
% |
38 |
|
% |
30 |
|
% |
24 |
|
% |
39 |
|
% |
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
Z |
|
Year
Ended December 31, |
|
Period
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019(a) |
|
Net
asset value, beginning of period |
$ |
18.19 |
|
|
$ |
22.25 |
|
|
$ |
19.03 |
|
|
$ |
18.08 |
|
|
Net
investment income (loss) (b) |
0.17 |
|
|
0.07 |
|
|
(0.02) |
|
|
(0.02) |
|
|
Net
realized and unrealized gain (loss) on investments |
(4.67) |
|
|
(2.69) |
|
|
3.27 |
|
|
1.34 |
|
|
Total
from investment operations |
(4.50) |
|
|
(2.62) |
|
|
3.25 |
|
|
1.32 |
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
Net
investment income |
(0.57) |
|
|
(0.06) |
|
|
(0.03) |
|
|
(0.37) |
|
|
Net
realized capital gains |
— |
|
|
(1.38) |
|
|
— |
|
|
— |
|
|
Total
distributions |
(0.57) |
|
|
(1.44) |
|
|
(0.03) |
|
|
(0.37) |
|
|
Net
asset value, end of period |
$ |
13.12 |
|
|
$ |
18.19 |
|
|
$ |
22.25 |
|
|
$ |
19.03 |
|
|
Total
return (c) |
(24.69) |
|
% |
(11.71) |
|
% |
17.09 |
|
% |
7.29 |
|
%(d) |
Ratios
to average net assets |
|
|
|
|
|
|
|
|
Gross
expenses |
1.17 |
|
% |
1.08 |
|
% |
1.13 |
|
% |
1.31 |
|
%(e) |
Net
expenses |
0.91 |
|
% |
0.90 |
|
% |
0.90 |
|
% |
0.90 |
|
%(e) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
expenses excluding interest |
0.90 |
|
% |
0.90 |
|
% |
0.90 |
|
% |
0.90 |
|
%(e) |
Net
investment income (loss) |
1.26 |
|
% |
0.33 |
|
% |
(0.12) |
|
% |
(0.27) |
|
%(e) |
Supplemental
data |
|
|
|
|
|
|
|
|
Net
assets, end of period (in millions) |
$ |
73 |
|
|
$ |
63 |
|
|
$ |
74 |
|
|
$ |
6 |
|
|
Portfolio
turnover rate |
11 |
|
% |
38 |
|
% |
30 |
|
% |
24 |
|
%(d) |
(a) For
the period September 16, 2019 (commencement of operations) through December 31,
2019.
(b) Calculated
based upon average shares outstanding
(c) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(d) Not
Annualized
(e) Annualized
|
|
|
EMERGING
MARKETS LEADERS FUND |
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
Class
A |
|
Period
Ended December 31, 2022(a) |
|
Net
asset value, beginning of period |
$ |
25.00 |
|
|
Net
investment income (b) |
0.04 |
|
|
Net
realized and unrealized (loss) on investments |
(4.26) |
|
|
Total
from investment operations |
(4.22) |
|
|
Distributions
from: |
|
|
Net
investment income |
(0.15) |
|
|
Net
asset value, end of period |
$ |
20.63 |
|
|
Total
return (c) |
(16.88) |
|
%(d) |
Ratios
to average net assets |
|
|
Gross
expenses |
6.18 |
|
%(e) |
Net
expenses |
1.48 |
|
%(e) |
Net
expenses excluding interest |
1.45 |
|
%(e) |
Net
investment income |
0.25 |
|
%(e) |
Supplemental
data |
|
|
Net
assets, end of period (in millions) |
$ |
1 |
|
|
Portfolio
turnover rate |
19 |
|
%(d) |
(a) For
the period March 1, 2022 (commencement of operations) through December 31,
2022.
(b) Calculated
based upon average shares outstanding
(c) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(d) Not
Annualized
(e) Annualized
|
|
|
EMERGING
MARKETS LEADERS FUND |
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
Class
I |
|
Period
Ended December 31, 2022(a) |
|
Net
asset value, beginning of period |
$ |
25.00 |
|
|
Net
investment income (b) |
0.15 |
|
|
Net
realized and unrealized (loss) on investments |
(4.27) |
|
|
Total
from investment operations |
(4.12) |
|
|
Distributions
from: |
|
|
Net
investment income |
(0.26) |
|
|
Net
asset value, end of period |
$ |
20.62 |
|
|
Total
return (c) |
(16.48) |
|
%(d) |
Ratios
to average net assets |
|
|
Gross
expenses |
4.55 |
|
%(e) |
Net
expenses |
0.88 |
|
%(e) |
Net
expenses excluding interest |
0.85 |
|
%(e) |
Net
investment income |
0.85 |
|
%(e) |
Supplemental
data |
|
|
Net
assets, end of period (in millions) |
$ |
2 |
|
|
Portfolio
turnover rate |
19 |
|
%(d) |
(a) For
the period March 1, 2022 (commencement of operations) through December 31,
2022.
(b) Calculated
based upon average shares outstanding
(c) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(d) Not
Annualized
(e) Annualized
|
|
|
EMERGING
MARKETS LEADERS FUND |
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
Class
Y |
|
Period
Ended December 31, 2022(a) |
|
Net
asset value, beginning of period |
$ |
25.00 |
|
|
Net
investment income (b) |
0.13 |
|
|
Net
realized and unrealized (loss) on investments |
(4.26) |
|
|
Total
from investment operations |
(4.13) |
|
|
Distributions
from: |
|
|
Net
investment income |
(0.24) |
|
|
Net
asset value, end of period |
$ |
20.63 |
|
|
Total
return (c) |
(16.51) |
|
%(d) |
Ratios
to average net assets |
|
|
Gross
expenses |
4.55 |
|
%(e) |
Net
expenses |
0.98 |
|
%(e) |
Net
expenses excluding interest |
0.95 |
|
%(e) |
Net
investment income |
0.75 |
|
%(e) |
Supplemental
data |
|
|
Net
assets, end of period (in millions) |
$ |
2 |
|
|
Portfolio
turnover rate |
19 |
|
%(d) |
(a) For
the period March 1, 2022 (commencement of operations) through December 31,
2022.
(b) Calculated
based upon average shares outstanding
(c) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(d) Not
Annualized
(e) Annualized
|
|
|
EMERGING
MARKETS LEADERS FUND |
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
Class
Z |
|
Period
Ended December 31, 2022(a) |
|
Net
asset value, beginning of period |
$ |
25.00 |
|
|
Net
investment income (b) |
0.17 |
|
|
Net
realized and unrealized (loss) on investments |
(4.28) |
|
|
Total
from investment operations |
(4.11) |
|
|
Distributions
from: |
|
|
Net
investment income |
(0.27) |
|
|
Net
asset value, end of period |
$ |
20.62 |
|
|
Total
return (c) |
(16.41) |
|
%(d) |
Ratios
to average net assets |
|
|
Gross
expenses |
5.92 |
|
%(e) |
Net
expenses |
0.78 |
|
%(e) |
Net
expenses excluding interest |
0.75 |
|
%(e) |
Net
investment income |
0.95 |
|
%(e) |
Supplemental
data |
|
|
Net
assets, end of period (in millions) |
$ |
1 |
|
|
Portfolio
turnover rate |
19 |
|
%(d) |
(a) For
the period March 1, 2022 (commencement of operations) through December 31,
2022.
(b) Calculated
based upon average shares outstanding
(c) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(d) Not
Annualized
(e) Annualized
|
|
|
ENVIRONMENTAL
SUSTAINABILITY FUND |
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
A |
|
Year
Ended December 31, 2022 |
|
Period
Ended December 31, 2021(a) |
|
Net
asset value, beginning of period |
$ |
24.24 |
|
|
$ |
25.00 |
|
|
Net
investment income (loss) (b) |
0.04 |
|
|
(0.09) |
|
|
Net
realized and unrealized (loss) on investments |
(5.95) |
|
|
(0.67) |
|
|
Total
from investment operations |
(5.91) |
|
|
(0.76) |
|
|
Distributions
from: |
|
|
|
|
Net
investment income |
(0.25) |
|
|
— |
|
|
Net
realized capital gains |
— |
|
(c) |
— |
|
|
Total
distributions |
(0.25) |
|
|
— |
|
|
Net
asset value, end of period |
$ |
18.08 |
|
|
$ |
24.24 |
|
|
Total
return (d) |
(24.42) |
|
% |
(3.04) |
|
%(e) |
Ratios
to average net assets |
|
|
|
|
Gross
expenses |
5.79 |
|
% |
6.68 |
|
%(f) |
Net
expenses |
1.25 |
|
% |
1.26 |
|
%(f) |
Net
expenses excluding interest |
1.25 |
|
% |
1.25 |
|
%(f) |
Net
investment income (loss) |
0.20 |
|
% |
(0.76) |
|
%(f) |
Supplemental
data |
|
|
|
|
Net
assets, end of period (in millions) |
$ |
1 |
|
|
$ |
1 |
|
|
Portfolio
turnover rate |
14 |
|
% |
— |
|
%(e) |
(a) For
the period July 14, 2021 (commencement of operations) through December 31,
2021.
(b) Calculated
based upon average shares outstanding
(c) Amount
represents less than $0.005 per share.
(d) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(e) Not
Annualized
(f) Annualized
|
|
|
ENVIRONMENTAL
SUSTAINABILITY FUND |
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
I |
|
Year
Ended December 31, 2022 |
|
Period Ended December 31,
2021(a) |
|
Net
asset value, beginning of period |
$ |
24.28 |
|
|
$ |
25.00 |
|
|
Net
investment income (loss) (b) |
0.10 |
|
|
(0.05) |
|
|
Net
realized and unrealized (loss) on investments |
(5.97) |
|
|
(0.67) |
|
|
Total
from investment operations |
(5.87) |
|
|
(0.72) |
|
|
Distributions
from: |
|
|
|
|
Net
investment income |
(0.31) |
|
|
— |
|
|
Net
realized capital gains |
— |
|
(c) |
— |
|
|
Total
distributions |
(0.31) |
|
|
— |
|
|
Net
asset value, end of period |
$ |
18.10 |
|
|
$ |
24.28 |
|
|
Total
return (d) |
(24.23) |
|
% |
(2.88) |
|
%(e) |
Ratios
to average net assets |
|
|
|
|
Gross
expenses |
4.29 |
|
% |
5.45 |
|
%(f) |
Net
expenses |
0.95 |
|
% |
0.96 |
|
%(f) |
Net
expenses excluding interest |
0.95 |
|
% |
0.95 |
|
%(f) |
Net
investment income (loss) |
0.50 |
|
% |
(0.46) |
|
%(f) |
Supplemental
data |
|
|
|
|
Net
assets, end of period (in millions) |
$ |
2 |
|
|
$ |
2 |
|
|
Portfolio
turnover rate |
14 |
|
% |
— |
|
%(e) |
(a) For
the period July 14, 2021 (commencement of operations) through December 31,
2021.
(b) Calculated
based upon average shares outstanding
(c) Amount
represents less than $0.005 per share.
(d) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(e) Not
Annualized
(f) Annualized
|
|
|
ENVIRONMENTAL
SUSTAINABILITY FUND |
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
Y |
|
Year
Ended December 31, 2022 |
|
Period Ended December 31,
2021(a) |
|
Net
asset value, beginning of period |
$ |
24.27 |
|
|
$ |
25.00 |
|
|
Net
investment income (loss) (b) |
0.08 |
|
|
(0.07) |
|
|
Net
realized and unrealized (loss) on investments |
(5.97) |
|
|
(0.66) |
|
|
Total
from investment operations |
(5.89) |
|
|
(0.73) |
|
|
Distributions
from: |
|
|
|
|
Net
investment income |
(0.29) |
|
|
— |
|
|
Net
realized capital gains |
— |
|
(c) |
— |
|
|
Total
distributions |
(0.29) |
|
|
— |
|
|
Net
asset value, end of period |
$ |
18.09 |
|
|
$ |
24.27 |
|
|
Total
return (d) |
(24.30) |
|
% |
(2.92) |
|
%(e) |
Ratios
to average net assets |
|
|
|
|
Gross
expenses |
4.42 |
|
% |
5.45 |
|
%(f) |
Net
expenses |
1.05 |
|
% |
1.06 |
|
%(f) |
Net
expenses excluding interest |
1.05 |
|
% |
1.05 |
|
%(f) |
Net
investment income (loss) |
0.40 |
|
% |
(0.56) |
|
%(f) |
Supplemental
data |
|
|
|
|
Net
assets, end of period (in millions) |
$ |
1 |
|
|
$ |
2 |
|
|
Portfolio
turnover rate |
14 |
|
% |
— |
|
%(e) |
(a) For
the period July 14, 2021 (commencement of operations) through December 31,
2021.
(b) Calculated
based upon average shares outstanding
(c) Amount
represents less than $0.005 per share.
(d) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(e) Not
Annualized
(f) Annualized
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
A |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
39.21 |
|
|
$ |
33.51 |
|
|
$ |
28.39 |
|
|
$ |
25.66 |
|
|
$ |
36.32 |
|
|
|
|
|
|
Net
investment income (loss) (a) |
0.89 |
|
|
0.50 |
|
|
0.13 |
|
|
0.17 |
|
|
(0.05) |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
2.16 |
|
|
5.73 |
|
|
5.17 |
|
|
2.81 |
|
|
(10.61) |
|
|
|
|
|
|
Total
from investment operations |
3.05 |
|
|
6.23 |
|
|
5.30 |
|
|
2.98 |
|
|
(10.66) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(1.04) |
|
|
(0.53) |
|
|
(0.18) |
|
|
(0.25) |
|
|
— |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
41.22 |
|
|
$ |
39.21 |
|
|
$ |
33.51 |
|
|
$ |
28.39 |
|
|
$ |
25.66 |
|
|
|
|
|
|
Total
return (b) |
7.74 |
|
% |
18.61 |
|
% |
18.68 |
|
% |
11.64 |
|
% |
(29.35) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
1.47 |
|
% |
1.48 |
|
% |
1.62 |
|
% |
1.60 |
|
% |
1.59 |
|
% |
|
|
|
|
Net
expenses |
1.38 |
|
% |
1.38 |
|
% |
1.38 |
|
% |
1.38 |
|
% |
1.38 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income (loss) |
2.08 |
|
% |
1.29 |
|
% |
0.53 |
|
% |
0.63 |
|
% |
(0.15) |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
140 |
|
|
$ |
152 |
|
|
$ |
106 |
|
|
$ |
118 |
|
|
$ |
194 |
|
|
|
|
|
|
Portfolio
turnover rate |
34 |
|
% |
28 |
|
% |
37 |
|
% |
33 |
|
% |
16 |
|
% |
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
C |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
33.28 |
|
|
$ |
28.57 |
|
|
$ |
24.27 |
|
|
$ |
21.93 |
|
|
$ |
31.28 |
|
|
|
|
|
|
Net
investment income (loss) (a) |
0.46 |
|
|
0.15 |
|
|
(0.06) |
|
|
(0.05) |
|
|
(0.29) |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
1.84 |
|
|
4.90 |
|
|
4.36 |
|
|
2.39 |
|
|
(9.06) |
|
|
|
|
|
|
Total
from investment operations |
2.30 |
|
|
5.05 |
|
|
4.30 |
|
|
2.34 |
|
|
(9.35) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.77) |
|
|
(0.34) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
34.81 |
|
|
$ |
33.28 |
|
|
$ |
28.57 |
|
|
$ |
24.27 |
|
|
$ |
21.93 |
|
|
|
|
|
|
Total
return (b) |
6.88 |
|
% |
17.67 |
|
% |
17.72 |
|
% |
10.67 |
|
% |
(29.89) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
2.39 |
|
% |
2.52 |
|
% |
2.65 |
|
% |
2.44 |
|
% |
2.32 |
|
% |
|
|
|
|
Net
expenses |
2.20 |
|
% |
2.20 |
|
% |
2.20 |
|
% |
2.20 |
|
% |
2.20 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income (loss) |
1.28 |
|
% |
0.45 |
|
% |
(0.27) |
|
% |
(0.19) |
|
% |
(0.98) |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
13 |
|
|
$ |
14 |
|
|
$ |
11 |
|
|
$ |
13 |
|
|
$ |
24 |
|
|
|
|
|
|
Portfolio
turnover rate |
34 |
|
% |
28 |
|
% |
37 |
|
% |
33 |
|
% |
16 |
|
% |
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
I |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
41.17 |
|
|
$ |
35.15 |
|
|
$ |
29.74 |
|
|
$ |
26.94 |
|
|
$ |
38.10 |
|
|
|
|
|
|
Net
investment income (a) |
1.17 |
|
|
0.67 |
|
|
0.26 |
|
|
0.30 |
|
|
0.10 |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
2.23 |
|
|
6.04 |
|
|
5.45 |
|
|
2.94 |
|
|
(11.17) |
|
|
|
|
|
|
Total
from investment operations |
3.40 |
|
|
6.71 |
|
|
5.71 |
|
|
3.24 |
|
|
(11.07) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(1.24) |
|
|
(0.69) |
|
|
(0.30) |
|
|
(0.44) |
|
|
(0.08) |
|
|
|
|
|
|
Return
of capital |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.01) |
|
|
|
|
|
|
Total
distributions |
(1.24) |
|
|
(0.69) |
|
|
(0.30) |
|
|
(0.44) |
|
|
(0.09) |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
43.33 |
|
|
$ |
41.17 |
|
|
$ |
35.15 |
|
|
$ |
29.74 |
|
|
$ |
26.94 |
|
|
|
|
|
|
Total
return (b) |
8.19 |
|
% |
19.12 |
|
% |
19.23 |
|
% |
12.06 |
|
% |
(29.04) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
1.10 |
|
% |
1.11 |
|
% |
1.14 |
|
% |
1.09 |
|
% |
1.06 |
|
% |
|
|
|
|
Net
expenses |
0.95 |
|
% |
0.95 |
|
% |
0.95 |
|
% |
0.95 |
|
% |
0.95 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
2.60 |
|
% |
1.66 |
|
% |
0.98 |
|
% |
1.05 |
|
% |
0.29 |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
503 |
|
|
$ |
386 |
|
|
$ |
358 |
|
|
$ |
460 |
|
|
$ |
945 |
|
|
|
|
|
|
Portfolio
turnover rate |
34 |
|
% |
28 |
|
% |
37 |
|
% |
33 |
|
% |
16 |
|
% |
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
Y |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
40.00 |
|
|
$ |
34.17 |
|
|
$ |
28.93 |
|
|
$ |
26.19 |
|
|
$ |
37.01 |
|
|
|
|
|
|
Net
investment income (a) |
1.05 |
|
|
0.62 |
|
|
0.20 |
|
|
0.24 |
|
|
0.04 |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
2.17 |
|
|
5.83 |
|
|
5.29 |
|
|
2.87 |
|
|
(10.84) |
|
|
|
|
|
|
Total
from investment operations |
3.22 |
|
|
6.45 |
|
|
5.49 |
|
|
3.11 |
|
|
(10.80) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(1.16) |
|
|
(0.62) |
|
|
(0.25) |
|
|
(0.37) |
|
|
(0.02) |
|
|
|
|
|
|
Return
of capital |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
(b) |
|
|
|
|
Total
distributions |
(1.16) |
|
|
(0.62) |
|
|
(0.25) |
|
|
(0.37) |
|
|
(0.02) |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
42.06 |
|
|
$ |
40.00 |
|
|
$ |
34.17 |
|
|
$ |
28.93 |
|
|
$ |
26.19 |
|
|
|
|
|
|
Total
return (c) |
7.99 |
|
% |
18.92 |
|
% |
18.99 |
|
% |
11.88 |
|
% |
(29.17) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
1.14 |
|
% |
1.18 |
|
% |
1.29 |
|
% |
1.24 |
|
% |
1.20 |
|
% |
|
|
|
|
Net
expenses |
1.13 |
|
% |
1.13 |
|
% |
1.13 |
|
% |
1.13 |
|
% |
1.13 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
2.41 |
|
% |
1.56 |
|
% |
0.76 |
|
% |
0.85 |
|
% |
0.11 |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
302 |
|
|
$ |
231 |
|
|
$ |
122 |
|
|
$ |
115 |
|
|
$ |
167 |
|
|
|
|
|
|
Portfolio
turnover rate |
34 |
|
% |
28 |
|
% |
37 |
|
% |
33 |
|
% |
16 |
|
% |
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Amount
represents less than $0.005 per share.
(c) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
|
|
|
INTERNATIONAL
INVESTORS GOLD FUND |
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
A |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
10.32 |
|
|
$ |
12.82 |
|
|
$ |
10.16 |
|
|
$ |
7.65 |
|
|
$ |
9.38 |
|
|
|
|
|
|
Net
investment income (loss) (a) |
0.03 |
|
|
— |
|
(b) |
(0.06) |
|
|
(0.06) |
|
|
(0.04) |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
(1.46) |
|
|
(1.84) |
|
|
4.22 |
|
|
2.94 |
|
|
(1.47) |
|
|
|
|
|
|
Total
from investment operations |
(1.43) |
|
|
(1.84) |
|
|
4.16 |
|
|
2.88 |
|
|
(1.51) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
— |
|
|
(0.66) |
|
|
(1.50) |
|
|
(0.37) |
|
|
(0.22) |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
8.89 |
|
|
$ |
10.32 |
|
|
$ |
12.82 |
|
|
$ |
10.16 |
|
|
$ |
7.65 |
|
|
|
|
|
|
Total
return (c) |
(13.86) |
|
% |
(14.22) |
|
% |
41.39 |
|
% |
38.03 |
|
% |
(15.99) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
1.42 |
|
%(d) |
1.34 |
|
%(d) |
1.34 |
|
% |
1.49 |
|
% |
1.47 |
|
% |
|
|
|
|
Net
expenses |
1.42 |
|
%(d) |
1.34 |
|
%(d) |
1.34 |
|
% |
1.45 |
|
% |
1.45 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income (loss) |
0.28 |
|
%(d) |
— |
|
%(d) |
(0.45) |
|
% |
(0.63) |
|
% |
(0.51) |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
243 |
|
|
$ |
302 |
|
|
$ |
378 |
|
|
$ |
277 |
|
|
$ |
200 |
|
|
|
|
|
|
Portfolio
turnover rate |
39 |
|
% |
23 |
|
% |
32 |
|
% |
21 |
|
% |
35 |
|
% |
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Amount
represents less than $0.005 per share.
(c) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(d) The
ratios presented do not reflect the Fund’s proportionate share of income and
expenses from the Fund’s investment in underlying funds.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
C |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
8.54 |
|
|
$ |
10.83 |
|
|
$ |
8.77 |
|
|
$ |
6.64 |
|
|
$ |
8.25 |
|
|
|
|
|
|
Net
investment loss (a) |
(0.04) |
|
|
(0.08) |
|
|
(0.13) |
|
|
(0.11) |
|
|
(0.09) |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
(1.20) |
|
|
(1.55) |
|
|
3.62 |
|
|
2.55 |
|
|
(1.30) |
|
|
|
|
|
|
Total
from investment operations |
(1.24) |
|
|
(1.63) |
|
|
3.49 |
|
|
2.44 |
|
|
(1.39) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
— |
|
|
(0.66) |
|
|
(1.43) |
|
|
(0.31) |
|
|
(0.22) |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
7.30 |
|
|
$ |
8.54 |
|
|
$ |
10.83 |
|
|
$ |
8.77 |
|
|
$ |
6.64 |
|
|
|
|
|
|
Total
return (b) |
(14.52) |
|
% |
(14.89) |
|
% |
40.31 |
|
% |
37.12 |
|
% |
(16.73) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
2.21 |
|
%(c) |
2.13 |
|
%(c) |
2.12 |
|
% |
2.31 |
|
% |
2.27 |
|
% |
|
|
|
|
Net
expenses |
2.20 |
|
%(c) |
2.13 |
|
%(c) |
2.12 |
|
% |
2.20 |
|
% |
2.20 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment loss |
(0.51) |
|
%(c) |
(0.79) |
|
%(c) |
(1.21) |
|
% |
(1.36) |
|
% |
(1.25) |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
36 |
|
|
$ |
49 |
|
|
$ |
63 |
|
|
$ |
38 |
|
|
$ |
32 |
|
|
|
|
|
|
Portfolio
turnover rate |
39 |
|
% |
23 |
|
% |
32 |
|
% |
21 |
|
% |
35 |
|
% |
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) The
ratios presented do not reflect the Fund’s proportionate share of income and
expenses from the Fund’s investment in underlying funds.
|
|
|
INTERNATIONAL
INVESTORS GOLD FUND |
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
I |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
14.22 |
|
|
$ |
17.31 |
|
|
$ |
13.32 |
|
|
$ |
9.93 |
|
|
$ |
12.05 |
|
|
|
|
|
|
Net
investment income (loss) (a) |
0.09 |
|
|
0.05 |
|
|
(0.02) |
|
|
(0.02) |
|
|
(0.01) |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
(2.01) |
|
|
(2.48) |
|
|
5.55 |
|
|
3.82 |
|
|
(1.89) |
|
|
|
|
|
|
Total
from investment operations |
(1.92) |
|
|
(2.43) |
|
|
5.53 |
|
|
3.80 |
|
|
(1.90) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
— |
|
|
(0.66) |
|
|
(1.54) |
|
|
(0.41) |
|
|
(0.22) |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
12.30 |
|
|
$ |
14.22 |
|
|
$ |
17.31 |
|
|
$ |
13.32 |
|
|
$ |
9.93 |
|
|
|
|
|
|
Total
return (b) |
(13.50) |
|
% |
(13.94) |
|
% |
41.88 |
|
% |
38.61 |
|
% |
(15.69) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
1.09 |
|
%(c) |
1.03 |
|
%(c) |
1.02 |
|
% |
1.09 |
|
% |
1.06 |
|
% |
|
|
|
|
Net
expenses |
1.00 |
|
%(c) |
1.00 |
|
%(c) |
1.00 |
|
% |
1.00 |
|
% |
1.00 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income (loss) |
0.70 |
|
%(c) |
0.34 |
|
%(c) |
(0.12) |
|
% |
(0.16) |
|
% |
(0.06) |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
156 |
|
|
$ |
203 |
|
|
$ |
244 |
|
|
$ |
236 |
|
|
$ |
244 |
|
|
|
|
|
|
Portfolio
turnover rate |
39 |
|
% |
23 |
|
% |
32 |
|
% |
21 |
|
% |
35 |
|
% |
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) The
ratios presented do not reflect the Fund’s proportionate share of income and
expenses from the Fund’s investment in underlying funds.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
Y |
|
|
Year
Ended December 31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
Net
asset value, beginning of year |
$ |
10.64 |
|
|
$ |
13.15 |
|
|
$ |
10.40 |
|
|
$ |
7.82 |
|
|
$ |
9.55 |
|
|
|
|
|
|
Net
investment income (loss) (a) |
0.06 |
|
|
0.03 |
|
|
(0.02) |
|
|
(0.03) |
|
|
(0.01) |
|
|
|
|
|
|
Net
realized and unrealized gain (loss) on investments |
(1.51) |
|
|
(1.88) |
|
|
4.31 |
|
|
3.01 |
|
|
(1.50) |
|
|
|
|
|
|
Total
from investment operations |
(1.45) |
|
|
(1.85) |
|
|
4.29 |
|
|
2.98 |
|
|
(1.51) |
|
|
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
— |
|
|
(0.66) |
|
|
(1.54) |
|
|
(0.40) |
|
|
(0.22) |
|
|
|
|
|
|
Net
asset value, end of year |
$ |
9.19 |
|
|
$ |
10.64 |
|
|
$ |
13.15 |
|
|
$ |
10.40 |
|
|
$ |
7.82 |
|
|
|
|
|
|
Total
return (b) |
(13.63) |
|
% |
(13.94) |
|
% |
41.68 |
|
% |
38.52 |
|
% |
(15.71) |
|
% |
|
|
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
1.11 |
|
%(c) |
1.06 |
|
%(c) |
1.05 |
|
% |
1.17 |
|
% |
1.18 |
|
% |
|
|
|
|
Net
expenses |
1.10 |
|
%(c) |
1.06 |
|
%(c) |
1.05 |
|
% |
1.10 |
|
% |
1.10 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income (loss) |
0.59 |
|
%(c) |
0.29 |
|
%(c) |
(0.12) |
|
% |
(0.29) |
|
% |
(0.17) |
|
% |
|
|
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
241 |
|
|
$ |
306 |
|
|
$ |
375 |
|
|
$ |
176 |
|
|
$ |
106 |
|
|
|
|
|
|
Portfolio
turnover rate |
39 |
|
% |
23 |
|
% |
32 |
|
% |
21 |
|
% |
35 |
|
% |
|
|
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) The
ratios presented do not reflect the Fund’s proportionate share of income and
expenses from the Fund’s investment in underlying funds.
VANECK
FUNDS
Dated
May 1, 2023
EMERGING
MARKETS FUND
CLASS
A: GBFAX / CLASS C: EMRCX / CLASS I: EMRIX / CLASS Y: EMRYX / CLASS Z:
EMRZX
EMERGING
MARKETS LEADERS FUND
CLASS
A: ELMAX / CLASS I: ELMIX / CLASS Y: ELMYX / CLASS Z: ELMZX
ENVIRONMENTAL
SUSTAINABILITY FUND
CLASS
A: ENVAX / CLASS I: ENVIX / CLASS Y: ENVYX
GLOBAL
RESOURCES FUND
CLASS
A: GHAAX / CLASS C: GHACX / CLASS I: GHAIX / CLASS Y: GHAYX
INTERNATIONAL
INVESTORS GOLD FUND
CLASS
A: INIVX / CLASS C: IIGCX / CLASS I: INIIX / CLASS Y: INIYX
This
Appendix A is not a prospectus. It should be read in conjunction with the
prospectus dated May 1, 2023 (the “Prospectus”) for VanEck Funds (the “Trust”),
relating to each of Emerging Markets Fund, Emerging Markets Leaders Fund,
Environmental Sustainability Fund, Global Resources Fund and International
Investors Gold Fund (each, a “Fund” and together, the “Funds”), as it may be
revised from time to time. A copy of the Prospectus for the Trust, relating to
the Funds, may be obtained without charge by visiting the VanEck website at
vaneck.com, by calling toll free 800.826.1115 or by writing to the Trust or Van
Eck Securities Corporation, the Fund’s distributor (the “Distributor”). The
information disclosed in this Appendix A is part of, and incorporated in, the
Prospectus. Capitalized terms used herein that are not defined have the same
meaning as in the Prospectus, unless otherwise noted. For the avoidance of
doubt, for purposes of this Appendix A, references to a CDSC below also include
the contingent deferred redemption charge (“CDRC”) as defined in the
Prospectus.
Specific
intermediaries may have different policies and procedures regarding the
availability of front-end sales load waivers or contingent deferred sales charge
(“CDSC”) waivers, which are discussed below. In addition, please see the section
of the Prospectus entitled “Shareholder Information-Sales Charges” for more
information on sales charges and waivers available for different classes. In all
instances, it is the purchaser’s responsibility to notify the Funds or the
purchaser’s financial intermediary at the time of purchase of any facts
qualifying the purchaser for sales charge discounts or waivers.
A.Shareholders
purchasing Fund shares through a Merrill Lynch platform or account will be
eligible only for the following load waivers (front-end sales charge waivers and
contingent deferred, or back-end, sales charge waivers) and discounts, which may
differ from those disclosed elsewhere in these Funds’ Prospectus or
SAI.
|
|
|
Front-end
Sales Load Waivers on Class A Shares available at Merrill
Lynch |
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including
health savings accounts) and trusts used to fund those plans, provided
that the shares are not held in a commission-based brokerage account and
shares are held for the benefit of the plan |
Shares
purchased by a 529 Plan (does not include 529 Plan units or 529-specific
share classes or equivalents) |
Shares
purchased through a Merrill Lynch affiliated investment advisory
program |
Shares
exchanged due to the holdings moving from a Merrill Lynch affiliate
investment advisory program to a Merrill Lynch brokerage (non-advisory)
account pursuant policies relating to sales load discounts and
waivers |
Shares
purchased by third party investment advisors on behalf of their advisory
clients through Merrill Lynch’s platform |
Shares
of funds purchased through the Merrill Edge Self-Directed platform (if
applicable) |
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family) |
Shares
exchanged from Class C (i.e. level-load) shares of the same fund pursuant
to Merrill
Lynch’s
policies relating to sales load discounts and waivers |
Employees
and registered representatives of Merrill Lynch or its affiliates and
their family members |
Directors
or Trustees of the Fund, and employees of the Fund’s investment adviser or
any of its affiliates, as described in this prospectus |
Eligible
shares purchased from the proceeds of redemptions within the same fund
family, provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and
(3) redeemed shares were subject to a front-end or deferred sales load
(known as Rights of Reinstatement). Automated transactions (i.e.
systematic purchases and withdrawals) and purchases made after shares are
automatically sold to pay Merrill Lynch’s account maintenance fees are not
eligible for reinstatement |
|
|
|
CDSC
Waivers on A, B and C Shares available at Merrill Lynch |
Death
or disability of the shareholder |
Shares
sold as part of a systematic withdrawal plan as described in the Fund's
prospectus |
Return
of excess contributions from an IRA Account |
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts pursuant to the Internal Revenue Code |
Shares
sold to pay Merrill Lynch fees but only if the transaction is initiated by
Merrill Lynch |
Shares
acquired through a right of reinstatement |
Shares
held in retirement brokerage accounts, that are exchanged for a lower cost
share class due to transfer to certain fee based accounts or platforms
(applicable to A and C shares only) |
Shares
received through an exchange due to the holdings moving from a Merrill
Lynch affiliated investment advisory program to a Merrill Lynch brokerage
(non-advisory) account pursuant to Merrill Lynch’s policies relating to
sales load discounts and waivers |
Front-end
load Discounts Available at Merrill Lynch: Breakpoints, Rights of
Accumulation & Letters of Intent |
Breakpoints
as described in this prospectus. |
Rights
of Accumulation (ROA) which entitle shareholders to breakpoint discounts
as described in the Fund's prospectus will be automatically calculated
based on the aggregated holding of fund family assets held by accounts
(including 529 program holdings, where applicable) within the purchaser’s
household at Merrill Lynch. Eligible fund family assets not held at
Merrill Lynch may be included in the ROA calculation only if the
shareholder notifies his or her financial advisor about such
assets |
Letters
of Intent (LOI) which allow for breakpoint discounts based on anticipated
purchases within a fund family, through Merrill Lynch, over a 13-month
period of time (if applicable) |
B.Shareholders
purchasing Fund shares through a Morgan Stanley Wealth Management transactional
brokerage account will be eligible only for the following front-end sales charge
waivers with respect to Class A shares, which may differ from and may be more
limited than those disclosed elsewhere in these Funds’ Prospectus or
SAI.
|
|
|
Front-end
Sales Charge Waivers on Class A Shares available at Morgan Stanley Wealth
Management |
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh
plans |
Morgan
Stanley employee and employee-related accounts according to MSSB’s account
linking rules |
Shares
purchased through reinvestment of dividends and capital gains
distributions when purchasing shares of the same fund |
Shares
purchased through a Morgan Stanley self-directed brokerage
account |
Class
C (i.e., level-load) shares that are no longer subject to a contingent
deferred sales charge and are converted to Class A shares of the same fund
pursuant to Morgan Stanley Wealth Management’s share class conversion
program |
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (i) the repurchase occurs within 90 days following the
redemption, (ii) the redemption and purchase occur in the same account,
and (iii) redeemed shares were subject to a front-end or deferred sales
charge. |
C.Shareholders
purchasing Fund shares through a Raymond James platform or account will be
eligible only for the following load waivers (front-end sales charge waivers and
contingent deferred, or back-end, sales charge waivers) and discounts, which may
differ from those disclosed elsewhere in these Funds’ Prospectus or
SAI.
|
|
|
Front-end
sales load waivers on Class A shares available at Raymond
James |
Shares
purchased in an investment advisory program. |
Shares
purchased within the same fund family through a systematic reinvestment of
capital gains and dividend distributions. |
Employees
and registered representatives of Raymond James or its affiliates and
their family members as designated by Raymond James. |
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and
(3) redeemed shares were subject to a front-end or deferred sales load
(known as Rights of Reinstatement). |
A
shareholder in the Fund’s Class C shares will have their shares converted
at net asset value to Class A shares (or the appropriate share class) of
the Fund if the shares are no longer subject to a CDSC and the conversion
is in line with the policies and procedures of Raymond
James. |
|
|
|
CDSC
Waivers on Classes A, B and C shares available at Raymond
James |
Death
or disability of the shareholder. |
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
prospectus. |
Return
of excess contributions from an IRA Account. |
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on
applicable IRS regulations as described in the fund’s
prospectus. |
Shares
sold to pay Raymond James fees but only if the transaction is initiated by
Raymond James. |
Shares
acquired through a right of
reinstatement. |
|
|
|
Front-end
load discounts available at Raymond James: breakpoints, and/or rights of
accumulation, and letters of intent |
Breakpoints
as described in this prospectus. |
Rights
of accumulation which entitle shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of fund family
assets held by accounts within the purchaser’s household at Raymond James.
Eligible fund family assets not held at Raymond James may be included in
the calculation of rights of accumulation calculation only if the
shareholder notifies his or her financial advisor about such
assets. |
Letters
of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family, over a 13-month time period. Eligible fund
family assets not held at Raymond James may be included in the calculation
of letters of intent only if the shareholder notifies his or her financial
advisor about such assets. |
D.Shareholders
purchasing Fund shares through a Janney Montgomery Scott LLC (“Janney”)
brokerage account will be eligible for the following load
waivers
(front-end sales charge waivers and contingent deferred sales charge (“CDSC”, or
back-end sales charge, waivers) and discounts, which may differ from those
disclosed elsewhere in these Funds' Prospectus or SAI.
|
|
|
Front-end
sales charge* waivers on Class A shares available at Janney |
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family). |
Shares
purchased by employees and registered representatives of Janney or its
affiliates and their family members as designated by Janney. |
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within ninety (90) days following the
redemption, (2) the redemption and purchase occur in the same account, and
(3) redeemed shares were subject to a front-end or deferred sales load
(i.e., right of reinstatement). |
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh
plans. |
Shares
acquired through a right of reinstatement. |
Class
C shares that are no longer subject to a contingent deferred sales charge
and are converted to Class A shares of the same fund pursuant to Janney’s
policies and procedures. |
|
|
|
CDSC
waivers on Class A and C shares available at Janney |
Shares
sold upon the death or disability of the shareholder. |
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus. |
Shares
purchased in connection with a return of excess contributions from an IRA
account. |
Shares
sold as part of a required minimum distribution for IRA and other
retirement accounts if the redemption is taken in or after the year the
shareholder reaches qualified age based on applicable IRS regulations.
|
Shares
sold to pay Janney fees but only if the transaction is initiated by
Janney. |
Shares
acquired through a right of reinstatement. |
Shares
exchanged into the same share class of a different
fund. |
|
|
|
Front-end
sales charge* discounts available at Janney: breakpoints, rights of
accumulation, and/or letters of intent |
Breakpoints
as described in the fund’s Prospectus. |
Rights
of accumulation (“ROA”), which entitle shareholders to breakpoint
discounts, will be automatically calculated based on the aggregated
holding of fund family assets held by accounts within the purchaser’s
household at Janney. Eligible fund family assets not held at Janney may be
included in the ROA calculation only if the shareholder notifies his or
her financial advisor about such assets. |
Letters
of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family, over a 13-month time period. Eligible fund
family assets not held at Janney Montgomery Scott may be included in the
calculation of letters of intent only if the shareholder notifies his or
her financial advisor about such assets. |
*Also
referred to as an “initial sales charge.”
E.
Shareholders purchasing Fund shares through a Baird platform or account will
only be eligible for the following sales charge waivers (front-end sales charge
waivers and CDSC waivers) and discounts, which may differ from those disclosed
elsewhere in these Funds' Prospectus or the SAI.
|
|
|
Front-End
Sales Charge Waivers on Class A shares Available at Baird |
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund. |
Shares
purchased by employees and registered representatives of Baird or its
affiliate and their family members as designated by Baird. |
Shares
purchased from the proceeds of redemptions from another VanEck Fund,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and
(3) the redeemed shares were subject to a front-end or deferred sales
charge (known as rights of reinstatement). |
A
shareholder in the Fund's Class C Shares will have their shares converted
at net asset value to Class A shares of the Fund if the shares are no
longer subject to CDSC and the conversion is in line with the policies and
procedures of Baird. |
Employer-sponsored
retirement plans or charitable accounts in a transactional brokerage
account at Baird, including 401(k) plans, 457 plans, employer-sponsored
403(b) plans, profit sharing and money purchase pension plans and defined
benefit plans. For purposes of this provision, employer-sponsored
retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs.
|
|
|
|
CDSC
Waivers on Class A and C shares Available at Baird |
Shares
sold due to death or disability of the shareholder. |
Shares
sold as part of a systematic withdrawal plan as described in the Fund’s
Prospectus. |
Shares
bought due to returns of excess contributions from an IRA
Account. |
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching age based on applicable Internal
Revenue Service regulations as described in the Fund’s
prospectus. |
Shares
sold to pay Baird fees but only if the transaction is initiated by
Baird. |
Shares
acquired through a right of
reinstatement. |
|
|
|
Front-End
Sales Charge Discounts Available at Baird: Breakpoints and/or Rights of
Accumulations |
Breakpoints
as described in this Prospectus. |
Rights
of accumulations which entitle shareholders to breakpoint discounts will
be automatically calculated based on the aggregated holding of VanEck Fund
assets held by accounts within the purchaser’s household at Baird.
Eligible VanEck Fund assets not held at Baird may be included in the
rights of accumulations calculation only if the shareholder notifies his
or her financial advisor about such assets. |
Letters
of Intent (LOI) allow for breakpoint discounts based on anticipated
purchases of VanEck Fund shares through Baird, over a 13-month period of
time. |
F.
Shareholders purchasing Fund shares through a Stifel, Nicolaus & Company,
Incorporated (“Stifel”) platform or account or who own shares for which Stifel
or an affiliate is the broker-dealer of record are eligible for the following
additional sales charge waiver, which may differ from those disclosed elsewhere
in this Fund’s Prospectus or SAI.
|
|
|
Front-end
Sales Load Waiver on Class A Shares available at Stifel |
Class
C shares that have been held for more than seven (7) years will be
converted to Class A shares of the same Fund pursuant to Stifel’s policies
and procedures. |
G.
Shareholders purchasing Fund shares through an Ameriprise Financial brokerage
account are eligible for the following front-end sales charge waivers, which may
differ from those disclosed elsewhere in this Fund’s prospectus or
SAI.
|
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Front-End
Sales Charge Waivers on Class A shares Available at Ameriprise
Financial |
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs or SAR-SEPs. |
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same Fund (but not any other
fund within the same fund family). |
Shares
exchanged from Class C shares of the same fund in the month of or
following the 7-year anniversary of the purchase date. To the extent that
this prospectus elsewhere provides for a waiver with respect to exchanges
of Class C shares or conversion of Class C shares following a shorter
holding period, that waiver will apply. |
Employees
and registered representatives of Ameriprise Financial or its affiliates
and their immediate family members. |
Shares
purchased by or through qualified accounts (including IRAs, Coverdell
Education Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and
defined benefit plans) that are held by a covered family member, defined
as an Ameriprise financial advisor and/or the advisor’s spouse, advisor’s
lineal ascendant (mother, father, grandmother, grandfather, great
grandmother, great grandfather), advisor’s lineal descendant (son,
step-son, daughter, step-daughter, grandson, granddaughter, great
grandson, great granddaughter) or any spouse of a covered family member
who is a lineal descendant. |
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and
(3) redeemed shares were subject to a front-end or deferred sales load
(i.e. Rights of Reinstatement). |
For
more detailed information, see the SAI, which is legally a part of and is
incorporated by reference into this prospectus. The SAI includes information
regarding, among other things: the Fund and its investment policies and risks;
management of the Fund, investment advisory and other services, the Board of
Trustees, and tax matters related to the Fund.
Additional
information about the investments is available in the Funds’ annual and
semi-annual reports to shareholders. In the Funds’ annual reports, you will find
a discussion of the market conditions and investment strategies that
significantly affected each Fund’s performance during its last fiscal
year.
▪Call
VanEck at 800.826.1115, or visit the VanEck website at vaneck.com to request,
free of charge, the annual or semi-annual reports, the SAI, information
regarding applicable sales loads, breakpoint discounts, reduced or waived sales
charges and eligibility minimums, or other information about the
Funds.
▪Reports
and other information about the Funds are available on the EDGAR Database on the
SEC’s Internet site at
http://www.sec.gov.
In addition, copies of this information may be obtained, after paying a
duplicating fee, by electronic request at the following e-mail address:
[email protected].
▪For
more information about the different sales load variations imposed by financial
intermediaries, see Appendix A, “Intermediary Sales Charge Discounts and
Waivers,” which is incorporated herein by reference and is legally a part of
this prospectus.
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Transfer
Agent:
SS&C
GIDS, Inc.
P.O.
Box 218407
Kansas
City, Missouri 64121-8407
SEC
Registration Number: 811-04297
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800.826.2333 vaneck.com |
VEFPRO |