Jan van Eck, CEO, provides an update on his investment outlook for 2016. The rally in commodities has done more than provide an investment opportunity; it has also driven positive performance in a number of other asset classes. Commodities Stand Out.
https://youtube.com/watch?v=ve_FNl8AsJQ
TOM BUTCHER: Jan, commodities have seen a rebound in 2016. What’s your outlook for the rest of the year?
JAN VAN ECK: We’re very happy about the first quarter rebound. We do think commodities have bottomed and there are a couple of factors to consider. What we always stress, because I think it’s the most important thing for people to understand, is the supply response. We think there has always been a growing demand for commodities around the world, whether it’s energy, natural gas, oil, or metals, such as copper. What caused prices to fall was an oversupply situation, which we think has been corrected. We’re glad to see that demand has caught up with supply.
I think the way for investors to think about this current environment is to consider this as an opportunity if one takes a much longer term perspective. We investors tend to be very focused on the short term. Energy is now very low as a percent of the overall S&P 500® Index. At its peak it was close to 16% and it’s near 6% now. Taking a multi-decade perspective tells us that energy is relatively cheap right now. Similarly, if you look at gold shares over a longer period of time, you may see that while they’ve risen a great deal this year, they may still have much further to go because they fell so far.
My Message to Investors: This is a Great Opportunity
That is my number one message to investors: This is a great longer term opportunity. Don’t obsess about the correct entry point.
BUTCHER: But global growth has been slow, debt levels have been high, and some governments have actually resorted to negative rates.
VAN ECK: We’ve seen this year a real inflection point, as Japan brought some of its interest rates negative. The question is how do you get economic growth going? After the financial crisis in the U.S., we had the same response: zero interest rates to try to stimulate economic growth. I think central banks are now basically taking it to the next level, i.e., negative interest rates. Federal Reserve Chair Janet Yellen spoke about this in her recent testimony, and former Fed Chair Ben Bernanke has been speaking about negative interest rates as well.
Negative Interest Rates May Cause Investors to Disengage
We think negative rates can be dangerous. Rather than stimulating the economy, negative interest rates, I believe, can cause people to withdraw from participating. Think about it from an investor’s perspective. It is very worrisome when a bank will only give you 99 cents at the end of the year when you gave it a dollar in January. I think that can make people take less risk rather than engage in order to help stimulate growth.
Negative interest rates are fantastic for gold because gold doesn’t pay a coupon, unlike bonds or stocks that pay dividends. Gold always has to compete with other financial assets but if financial assets are costing you money in a negative interest rate environment, we see no reason not to own gold. We think that’s one of the reasons why gold has been rallying this year.
VAN ECK: China is the second largest economy in the world and we think that every investment committee needs to have a view on China. Our view has been that, while there are some growing pains, and the devaluation of the renminbi was a major event last year, there are no systemic risks [i.e., risks inherent to China’s entire economy, rather than a single segment of the economy].
One of the things that we love to talk about is new China versus old China. New China is characterized by the consumer-driven and healthcare sectors; old China is steel, coal, and heavy manufacturing. Old China is continuing to face profitability issues. Another matter that we’ve recently been discussing is the growth of China’s overall debt levels, which are particularly concentrated in old China. There is between $1 to $2 trillion of bad debt in China right now. China’s economy amounts to $10 trillion and its overall debt level is approximately $20 trillion. These are large numbers. However, not every bad debt goes to zero, but the bad debt is very concentrated in the old economy sectors.1
We don’t think that causes a systemic risk but it may cause lumpiness in the performance of some of China’s financial assets. Because various regions will be badly affected, people who have fixed income exposure to those regions will likely be badly impacted. There are likely to be some defaults. Still, we think it’s a good thing because it’s a healthy process.
What’s Changed in our Outlook Since January
BUTCHER: Jan, you described your outlook at the beginning of 2016. How has it changed since January?
VAN ECK: Several important things happened in the first quarter. First of all, we thought that credit was very cheap, meaning interest rates had risen on MLPs [master limited partnerships] and on high yield bonds, which were almost showing signs of distress. We also said that this represented a great investment opportunity. In fact, high yield has outperformed the U.S. equity market2. Right now, I think that high risk bonds are a little less appealing today than they were when we first started the year.
Commodities Q1 Rally Creates Positive Inflection Point
Additionally, I think the equity markets still have a lot of struggling to do because price-to-earnings ratios are very high. Earnings fell last year in the U.S. They should be recovering now, looking forward over the next 12 months. Part of the reason is the strong U.S. dollar. Overall, we think equities are so-so and the U.S. economy, as well as the global economy, will muddle along.
Commodities were the big story in the first quarter. They dragged up other asset classes. For example, they helped emerging markets debt; they’ve helped Latin America. A good amount of high yield U.S. debt was energy-related, and it has rallied tremendously. It is interesting that what can be characterized as a bottom-up phenomenon of supply cuts kicking in within the commodities sector has helped other asset classes from a macro perspective.
Overall, we believe that commodities are the standout from a multi-year view. This is a great time for investors to look at them, given that we believe this is an inflection point.
BUTCHER: Thank you very much.
Market Insights
by Jan van Eck, CEO
An innovator of investment solutions, Jan van Eck has created a multitude of strategies spanning international, emerging markets, and commodities opportunities. He plays an active role in shaping the firm’s actively managed and ETF investment offerings. Jan’s research focus is on developments in China and technology’s effect on the financial services industry.
IMPORTANT DISCLOSURE
1Source: CEIC, HSBC. Data as of December 2015.
2Source: Bloomberg, March 31, 2016.
This content is published in the United States for residents of specified countries. Investors are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this content. Nothing in this content should be considered a solicitation to buy or an offer to sell shares of any investment in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction, nor is it intended as investment, tax, financial, or legal advice. Investors should seek such professional advice for their particular situation and jurisdiction. You can obtain more specific information on VanEck strategies by visiting Investment Strategies.
The views and opinions expressed are those of the speaker(s) and are current as of the posting date. Commentaries are general in nature and should not be construed as investment advice. Opinions are subject to change with market conditions. All performance information is historical and is not a guarantee of future results.
Please note that Van Eck Securities Corporation offers investment portfolios that invest in the asset class(es) mentioned in this post and video. You can lose money by investing in a commodities fund. Any investment in a commodities fund should be part of an overall investment program, not a complete program. Commodities are assets that have tangible properties, such as oil, metals, and agriculture. Commodities and commodity-linked derivatives may be affected by overall market movements and other factors that affect the value of a particular industry or commodity, such as weather, disease, embargoes or political or regulatory developments. The value of a commodity-linked derivative is generally based on price movements of a commodity, a commodity futures contract, a commodity index or other economic variables based on the commodity markets. Derivatives use leverage, which may exaggerate a loss. A commodities fund is subject to the risks associated with its investments in commodity-linked derivatives, risks of investing in wholly owned subsidiary, risk of tracking error, risks of aggressive investment techniques, leverage risk, derivatives risks, counterparty risks, non-diversification risk, credit risk, concentration risk and market risk. The use of commodity-linked derivatives such as swaps, commodity-linked structured notes and futures entails substantial risks, including risk of loss of a significant portion of their principal value, lack of a secondary market, increased volatility, correlation risk, liquidity risk, interest-rate risk, market risk, credit risk, valuation risk and tax risk. Gains and losses from speculative positions in derivatives may be much greater than the derivative’s cost. At any time, the risk of loss of any individual security held by a commodities fund could be significantly higher than 50% of the security’s value. Investment in commodity markets may not be suitable for all investors. A commodity fund’s investment in commodity-linked derivative instruments may subject the fund to greater volatility than investment in traditional securities.
Investing involves risk, including possible loss of principal. An investor should consider investment objectives, risks, charges and expenses of any investment strategy carefully before investing. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Van Eck Securities Corporation.
iShares Metaverse UCITSETF USD (Acc) (CBUV ETF) med ISIN IE000RN58M26, försöker följa STOXX Global Metaverse-index. STOXX Global Metaverse-index spårar företag från hela världen som har affärsverksamhet i metaverse-ekosystemet. Aktierna som ingår filtreras enligt ESG-kriterier (miljö, social och bolagsstyrning).
Den börshandlade fondens TER (total cost ratio) uppgår till 0,50 % p.a. iShares Metaverse UCITSETF USD (Acc) är den enda ETF som följer STOXX Global Metaverse-index. ETF:n replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Utdelningarna ackumuleras och återinvesteras.
iShares Metaverse UCITSETF USD (Acc) är en liten ETF med tillgångar på 88 miljoner euro under förvaltning. Denna ETF anserades den 7 december 2022 och har sin hemvist i Irland.
Investeringsmål
Fonden strävar efter att uppnå en avkastning, genom en kombination av kapitaltillväxt och inkomst, som återspeglar avkastningen från STOXX Global Metaverse Index.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest och Avanza.
Jane Edmondson, Head of Index Product Strategy på TMXVettaFi, träffade Steve Darling från Proactive för att diskutera det snabbt utvecklande globala försvarslandskapet och de investeringsimplikationer som en europeisk försvarsutgiftsboom medför. Med geopolitiska spänningar på uppgång och skiftande försvarsprioriteringar måste investerare navigera efter nya möjligheter och risker i sektorn.
Edmondson lyfte fram Europas oöverträffade ökning av försvarsutgifterna, ett direkt svar på USA:s beslut att minska militärt bistånd till Ukraina. Centralt i denna förändring är EUs initiativ ”Rearm Europe Readiness 2030” på 800 miljarder euro, som syftar till att stärka den militära beredskapen. Detta inkluderar betydande investeringar i nyckelförsvarstekniker och en dedikerad kreditfacilitet på 150 miljarder euro för att förbättra militär kapacitet.
”Det kommer att bli mycket utgifter framöver,” noterade Edmondson och betonade stora tillväxtområden som artificiell intelligens, cyberförsvar, drönarteknik och avancerade artillerisystem.
Hon påpekade att ledande europeiska försvarsföretag – inklusive Rheinmetall, BAE Systems, Thales, Dassault och Leonardo SPA – kommer att dra stor nytta av denna expansion. Dessutom framträder Sydkoreas Hanwha Aerospace som en nyckelspelare i globala försvarskontrakt. Däremot upplever amerikanska försvarsföretag motvind på grund av budgetnedskärningar och inställda upphandlingsavtal, vilket leder till en relativ nedgång i sektorn.
En annan kritisk förändring av global försvarsupphandling håller på att utvecklas när traditionella amerikanska allierade omprövar sina försvarsinköp. Kanada och Portugal, till exempel, omvärderar beställningar på USA-tillverkade F-35 stridsflygplan till förmån för alternativa alternativ, som flygplan från Dassault Aviation.
Edmondson betonade att dessa geopolitiska omställningar skapar stark ekonomisk medvind, särskilt för Tyskland, som kommer att investera uppskattningsvis 500 miljarder euro i försvar under de kommande åren. Hon citerade en nyligen gjord rapport från Goldman Sachs, som förutspår att hälften av dessa utgifter direkt kommer att underblåsa BNP-tillväxten – en effekt som redan återspeglas på finansmarknaderna. Medan europeiska aktier, särskilt Euro Stoxx 50-index, tar fart, har stora amerikanska aktieindex kämpat för att hålla jämna steg.
”Detta är en kraftfull påminnelse för investerare att hålla sig diversifierade, behålla exponering utanför amerikanska marknader och allokera kapital till framväxande globala försvarsteman,” rådde Edmondson.
När globala militära strategier fortsätter att utvecklas kan investerare som positionerar sig tidigt i viktiga internationella försvarssektorer dra nytta av denna historiska förändring.
HanETF planerar en ny försvarsfond med fokus på europeiska företag som kommer att börja handlas i nästa vecka. Vi har ännu inte namnet på denna, men kortnamnet på tyska Xetra är 8RMY medan det i London blir tickern ARMY.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel Nordnet, SAVR, DEGIRO och Avanza.
WisdomTree Uranium and Nuclear Energy UCITSETF USD Unhedged Acc (WNUC ETF) med ISIN IE0003BJ2JS4, försöker spåra WisdomTree Uranium and Nuclear Energy UCITS-index. WisdomTree Uranium and Nuclear Energy UCITS-index spårar företag över hela världen som är engagerade inom uran- eller kärnenergiindustrin.
Den börshandlade fondens TER (total cost ratio) uppgår till 0,45 % p.a. WisdomTree Uranium and Nuclear Energy UCITSETF USD Unhedged Acc är den enda ETF som följer WisdomTree Uranium and Nuclear Energy UCITS-index. ETFen replikerar det underliggande indexets prestanda genom full replikering (köper alla indexbeståndsdelar). Utdelningarna i ETFen ackumuleras och återinvesteras.
Denna ETF lanserades den 5 mars 2025 och har sin hemvist i Irland.
WisdomTree Uranium and Nuclear Energy UCITSETF (”Fonden”) strävar efter att spåra pris- och avkastningsutvecklingen, före avgifter och utgifter, för WisdomTree Uranium and Nuclear Energy UCITS Index (”Indexet”). Indexet är utformat för att följa resultatet för företag som är involverade i uran- och kärnenergiindustrin.
Varför investera?
Få en unik strategi med hög övertygelse för investeringar i uran- och kärnenergiföretag.
Kärnenergi är avgörande för den framtida hållbara energimixen, eftersom kraven på energi ökar, kommer det att bli nödvändigt att skala upp tillförlitliga källor för ren energi.
Denna ETF erbjuder exponering mot en diversifierad korg av företag som är involverade i uran- och kärnenergimarknaden, såsom uranbrytning, byggande av kärnkraftsinfrastruktur eller bedriver avancerad forskning om framtida kärnteknik.
Analysen för urval och viktning av företag i indexet utförs av WisdomTree med betydande expertis i att konstruera tematiska index, vilket säkerställer att portföljkorgen förblir fokuserad och relevant.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel Nordnet, SAVR, DEGIRO och Avanza.